Retail Earnings, Shutdown Countdown | Bloomberg Surveillance 02/27/2024

>> IT'S VERY MUCH A >> LATE 90'S TYPE MARKET. >>MACROECONOMIC DATA IS NOT BEING CONSIDERED A SERIOUSLY AS THE LIKES OF NVIDIA RESULTS WHICH TO ME IS BONKERS. >> ON THE RIGHT SIDE REALLY HAVEN'T BROKEN ENOUGH TO DO THE DAMAGE EVERYONE THINKS. >> THE LONGER THE FED KEEPS RATES HIGHER, THE HIGHER WE SEE THE GROWTH. >> THE FED IS IN NO RUSH TO REMOVE THE POLICY FIRMING THEY PUT IN PLACE OVER THE PAST TWO YEARS. >> THIS IS BLOOMBERG SURVEILLANCE WITH JONATHAN FERRO, LISA ABRAMOWICZ AND ANNMARIE HORDE

RN. >> LIVE FOR AUDIENCE WORLDWIDE, GOOD MORNING. THIS IS BLOOMBERG SURVEILLANCE. TOGETHER WITH ANNMARIE HORDERN I'M JONATHAN FERRO. EQUITY LITTLE CHANGED. BIG COUPLE OF DAYS FOR U.S. RETAILERS KICKING THINGS OFF THIS HOUR. THEN ONTO TOMORROW TJX AND THEN BEST BUY. CROSSING THE BLOOMBERG RIGHT NOW. >> A HOST OF EARNINGS THROUGH THOSE NUMBERS. WHAT PEOPLE LOOKING AT RIGHT NOW IS THE POTENTIAL FOR SOME INDICATION OF WHETHER THE BLIP WE GOT IN JANUARY WAS JUST A BLIP OR SOMETHING GREATER. WHAT THEY

SEE IS BELOW ESTIMATES. THEY SEE A FULL YEAR OF TOTAL SALES VERSUS AN ESTIMATE OF 85.6 BILLION. JONATHAN: MACY'S UP NEXT. SPEAKING OF THE RETAILERS LET'S TALK ABOUT THE SUPERMARKET CHAINS AND THE TROUBLE BETWEEN KROGER AND ALBERTSONS FACING A CHALLENGE VERY PREDICTABLE CHALLENGE IN WASHINGTON DC. WASHINGTON SAYS WILL HURT THE CONSUMER. IF THE FTC IS SUCCESSFUL IN BLOCKING THIS MERGER WOULD BE HURTING CONSUMERS AND HELPING STRENGTHEN MULTICHANNEL RETAILERS SUCH AS WALMART, AMAZON, COSTCO. >> THE

VERY COMPANY THE FTC IS SAYING THEY WANT TO TRY AND RAIN IN. THIS IS JUST NO SURPRISE. ADD KROGER AND ALBERTSONS TO A LIST OF COMPANIES AND POTENTIAL TIEUPS THE FTC IS GONE AFTER. WHAT WE SEEN AS A MORE ROBUST ENGAGEMENT FROM THIS FTC AND DOJ WHEN IT COMES DOWN TO CRACKING DOWN ON ANTITRUST. BLOOMBERG INTELLIGENCE SAYS IT'S A COIN TOSS. 50% WHETHER OR NOT THIS GOES THROUGH. >> IF WE CANNOT MAKE THIS HAPPEN AND MAKE JETBLUE SPIRIT HAPPEN HOW ON EARTH WILL WE MAKE CAPITAL ONE DISCOVER HAPPEN ANYT

IME SOON. LISA: EVERYONE'S WATCHING TO SEE IF THIS WILL BE ALLOWED. TWO GROCERY STORES THAT MIGHT GO OUT OF BUSINESS VERSUS THE WALMARTS AND AMAZONS AND IF THEY ARE CITING CERTAIN THINGS LIKE BEING ABLE TO NEGOTIATE BETTER WITH LABOR UNIONS AND THINGS OF THAT NATURE WE ARE TALKING ABOUT A GAME CHANGER FOR THE M AND A SPACE. THEY ARE ALREADY SEEING A LOT OF COMMENTARY SAYING HOW MANY COMPANIES, HOW MANY BERKSHIRE HATHAWAY'S ARE NOT INTERESTED IN MAKING KIND OF ACQUISITIONS BECAUSE WHO IS GOING TO

GET THROUGH. >> TALKING ABOUT BIGGER BEING BETTER IN WASHINGTON. THEY TALK ABOUT BIG BEING BAD. I THINK WE TALK ABOUT SENATOR WARREN. SENATOR WARREN HAS COMPANY MAYBE EVEN ACROSS THE AISLE. LISA: -- ANNMARIE: SENATOR JOSH HAWLEY ALSO YESTERDAY WHAT WE SAW RELEASING THIS LETTER, 13 LAWMAKERS JOINING SENATOR ELIZABETH WARNING -- ELIZABETH WARREN ABOUT DISCOVER. SENATOR WARREN SENDING A LETTER TO LLOYD AUSTIN ABOUT CONCERN OF ANY M&A IN THE DEFENSE INDUSTRIAL COMPLEX WHICH MAKE ME THINK THERE IS A

SCOPE OF SECTORS SHE DOES NOT WANT TO SEE MERGING. LISA: THIS WAS THE GRANT OVER THE WEEKEND IN BRIEF. HERE'S THE QUESTION, HOW MANY OF THE BIG COMPANIES DOMINATING NOW ARE BENEFITING FROM THE M AND DAY THEY DID BEFORE AND HOW MANY COMPANIES ARE STRUGGLING IN SMALL THAT CANNOT GET IN THE GAME. JONATHAN: MARK ZUCKERBERG AND META OVER THE WEEKEND. LISA: YOU HAVE TO CALL ME OUT? THERE'S THE INSTAGRAM ISSUE. THEY BUILT UP TICK BY TICK. WHAT'S KOSHER AND WHAT'S NOT. JONATHAN: STILL TRYING TO WORK IT

OUT IN WASHINGTON. THERE SEEMS TO BE NO NUANCE IN BETWEEN. EQUITY FUTURES ON THE S&P 500 JUST ABOUT POSITIVE. YIELDS GOING ALMOST DOWN TO BASIS POINT. THERE IS SOME PRICE ACTION FOR THE EURO. WE WILL BE TALKING ABUT THAT IN 25 MINUTES. THROUGH THE NEXT HOUR WE CATCH UP WITH KATRINA DUDLEY WITH THE U.S. EQUITY RALLY STOLEN -- STALLING BREAD PRESIDENT BIDEN INVITES CONGRESSIONAL LEADERSHIP TO THE WHITE HOUSE TO AVOID A GOVERNMENT SHUTDOWN. WE APPROACH ONE YEAR SINCE THE COLLAPSE OF SVB. GIVEN THE

TOP STORY THIS HOUR THE EQUITY RALLY HITTING PAUSE. KATRINA FRANKLIN MUTUAL SAYING IT'S TIME TO DIVERSIFY. THE PERCENTAGE OF THE MARKET REPRESENTED BY TECH STOCKS IS CLOSE TO 30% BUT ONLY REPRESENTS 20% OF THE EARNINGS. WE ARE BEARISH BUT WE DO THINK IT'S TIME TO DIVERSIFY WHETHER CHEAP EVALUATIONS WITH GROWTH PROSPECTS. KATRINA JOINS US NOW. LET'S GET INTO THIS. MY NUMBER ONE QUESTION, WHAT ON EARTH DO YOU DO IF YOU'VE MISSED THIS RALLY NOT JUST LAST YEAR BUT THIS YEAR AS WELL. >> IT'S NOT WER

E ADVOCATING THAT YOU SUDDENLY DIVEST THE MAGNIFICENT SEVEN. I CAN SEE THIS WHEN YOU LOOK AT NVIDIA AND THE FACT THAT THEY BEAT REVENUE EXPECTATIONS. WHAT WE ARE SAYING IS WHY DIDN'T YOU GO SHOPPING IN THE 400 90 OTHER STOCKS THAT EXIST IN THIS MARKET. I THINK THE INTERESTING THING IS WITH THE MAGNIFICENT SEVEN IT REALLY HASN'T BEEN -- YOU HAVE NOT BEEN PAID TO BE A STOCK PICKER. WITH THE 498 YOU GOT TO PICK YOUR STOCKS AND PICK YOUR POINTS AND YOU HAVE TO START DOING RESEARCH. I'VE BEEN A RESEA

RCH ANALYST MY ENTIRE CAREER. >> THIS IS THE KEY FOR A LOT OF PEOPLE THEY ARE SAYING TIME TO GO INTO COMMITTEE LESS LOVED SECTORS LIKE CONSUMER CYCLICALS. I'M LOOKING AT THESE COMING IN DISAPPOINTED AND LOOKING AT THE RETAIL DATA FROM JANUARY. VERY DISAPPOINTING. DOES THAT GIVE YOU PAUSE TO GO INTO SOME OF THE CYCLICALS. KATRINA: WE ARE SEEING THIS IN SOME OF THE LOWER END CONSUMERS. SOMETHING LIKE A MCDONALD'S THAT CAME OUT SEEING THAT PRESSURE. WHAT WE NEED TO SEE IS A LITTLE BIT OF THE WAGE I

NCREASE. WE ARE SEEING IN A SMALL AMOUNT OF WAGE INCREASE BUT WE NEED TO SOLIDIFY AND SHORE UP THAT LOWER END CONSUMER. ONCE WE SHORE THEM UP I DON'T THINK WE WILL SEE THIS WEAKNESS. I THINK WE CAN HAVE LESS OF THIS DICHOTOMY BETWEEN THE MACRO STORY. >> THE GOOD NEWS BAD NEWS, THE REASON WHY AM GOING HERE IS YESTERDAY WE SAW YIELDS IN THE TWO-YEAR GO TO ITS HIGHEST LEVELS SINCE NOVEMBER OF LAST YEAR CERTAINLY SINCE THE PREVIOUS FED MEETING AND YET SMALL CAPS OUTPERFORMED. TWO PEOPLE NOT CARE ANY

MORE? KATRINA: WHY ARE THEY OUTPERFORMING? VALUATIONS ARE CHEAPER. YOU CAN GET ACCESS TO GREAT END MARKETS WITH MUCH MORE DISCOUNTED VALUATIONS. WE ARE ON SHORING AND THAT'S REALLY ACCELERATING AND YOU LOOK AT WHAT'S HAPPENING IN CHINA, AND EVERYTHING IN TERMS OF REALLY CONCERNED ABOUT THAT. GOING FOR YOUR DOMESTICALLY FOCUS SMALL CAPS MAKE SENSE FROM THAT PERSPECTIVE AS WELL. YOU'VE GOT SOME OF THE SMALL CAPS THAT ARE SAYING WHAT WE REALLY DON'T WANT TO KEEP RAISING DEBT. WE WILL START RAISING

EQUITY POTENTIALLY AND SOLIDIFY THOSE BALANCE SHEETS. THEY ARE THE COMPANIES THAT CAN DO, DAY BECAUSE THEY'RE SMALL ENOUGH. WE'VE GOT THINGS LIKE MCGRATH, YOU HAVE NO IDEA WHAT THEY DO BUT THEY WERE IN MOBILE OFFICE SPACE IN CLASSROOMS. THE FTC DOESN'T SEEM TO BE WORRIED ABOUT THOSE TYPES OF COMPANIES BECAUSE THEY ARE SMALLER AND WON'T GENERATE THE HEADLINES. JONATHAN: HAVE YOU EVER HEARD OF THE COMPANY, DONE. CAN YOU TALK ABOUT -- THAT'S WHAT LISA WAS GETTING AT HERE. HOW INSULATED ARE WE AND W

HY ARE WE SO INSULATED IN A WAY THAT MAYBE WE WEREN'T THREE OR FOUR MONTHS AGO. KATRINA: IT'S THE TELEGRAPHING THAT'S BEEN THE DIFFERENCE. YOU LOOK AT WHAT THE FED IS CONTINUING TO TELL US, DATA DEPENDENCY AND WE ARE WATCHING THAT DATA. WE LOOK AT THESE TRIANGLES WE'VE TALKED ABOUT BETWEEN INFLATION AND GROWTH RATES AND INTEREST RATES. IN TERMS OF INFLATION THAT'S COMING UNDER CONTROL BUT WE THINK IT WILL BE SLOWER THAN NORMAL AT THE RATE THE FED NEEDS. IT'S CONTINUE TO BE STRONG. THE FINAL THIR

D LINK OF THAT STALL WHICH SAID WE ARE GOING TO BE PATIENT AND IF YOU LOOK -- LISTEN THAT'S EXACTLY WHAT THEY'VE BEEN DOING. >> WE REDUCE THE MAGNITUDE OF CUTS THERE. SOME OF THE BULLS OUT THERE HOPEFUL, SUPER CONSTRUCTIVELY HAD THIS HAND OVER FROM FED DRIVEN MARKET TO AN EARNINGS DRIVEN MARKET. KATRINA: IF I HAVE A LOOK AT ANY KIND OF RATE CUTS WE ARE LOOKING AT A RATE CUT AS BEING MORE SUPPORTIVE AND REALLY JUST SUPPORTING THE ECONOMY INSTEAD OF A RATE CUT BEING IN RESPONSE TO VERY BAD DATA CO

MING OUT. I THINK IT'S A VERY DIFFERENT NARRATIVE AND THAT'S WHAT THE NARRATIVE HAS SHIFTED TO. IF WE GO BACK 18 MONTHS EVEN WE WERE TALKING ABOUT RECESSION FEARS AND RATE CUTS AS BEING THE OFFSET TO RECESSION. AND KIND OF MORE LIKE THEY CAN TAKE THEIR PADDLE OFF THE ACCELERATOR. >> THE FED WILL GIVE A THINGS ARE GOOD AND IF THINGS ARE BAD. MAYBE EVEN A LITTLE BIT MORE. SOME PEOPLE ARE SAYING EVALUATIONS AND THE REST LOOKING MORE ATTRACTIVE. DO YOU THINK THE U.S. WILL RETAIN THE BASTION OF GROWT

H AND OTHERWISE SLOW-GROWING. >> LET'S THINK ABOUT WHY THE U.S. IS THIS GROWTH ENGINE. I TALK ABOUT THE FACT IN THE UNITED STATES IT'S OK TO FAIL. IT IS ACTUALLY A BADGE OF HONOR TO HAVE LAUNCHED THREE STARTUPS THAT DID NOT WORK. SO WE HAVE THIS CULTURE OF INNOVATION AND THAT IS WHAT HAS DRIVEN US TO CREATE SO MANY LARGE CAP DOMINANT TECH PEERS. YES THEY WERE SUPPORTED BY, DAY BUT BY A LARGE YOU DON'T HAVE THAT OUTSIDE OF THE UNITED STATES. YOU HAVE SOME GOOD FRANCHISES BUT THERE ARE AREAS THAT

ARE A LITTLE BIT WORRIED. IF WE LOOK AT SOMETHING LIKE A NOVO NORDISK AND THE PERCENTAGE OF THE DAILY STOCK MARKET REPRESENTS IN JUST ONE STOCK IT'S MUCH MORE RISKY THAN FOR EXAMPLE THE MAGNIFICENT SEVEN IN THE PERCENTAGE OF THE STOCK MARKET. ANNMARIE: THE RISKS OF THAT CONCENTRATION IN THE UNITED STATES IS STILL QUITE LARGE. 90% OF THESE COMPANIES IN TERMS OF THEIR CHIPS ARE TIED TO TAIWAN. KATRINA: I THINK WHAT WE ARE SEEING AS THEY ARE ADDRESSING THOSE ALREADY. UNFORTUNATELY IT TAKES TIME BUT

TIME WILL CURE THAT PROBLEM IS THEY RESHORE MANUFACTURING BRAIN IF YOU TAKE A LOOK AT A PROBLEM IF TIME CAN CURE YOUR PROBLEM YOU'VE GOT TO WAIT IT OUT. I THINK THAT'S WHAT WE ARE SEEING IN THOSE MARKETS. >> WAY TOO MUCH BULLISHNESS. JUST TO SET THINGS OLD LIMIT MORE BALANCE THIS MORNING. INFLATION RISKS ARE SKEWED TO THE UPSIDE GIVEN LOOSE FINANCIAL CONDITIONS. WHICH COULD KEEP IT HIGHER FOR LONGER. HEARD THIS FROM MARCO LAST WEEK THERE IS A RISK OF A NARRATIVE TURNING BACK FROM GOLDILOCKS TO

SOMETHING LIKE 1970'S STAGFLATION. LISA: HE IS NOT ALONE AND IF YOU LOOK AT THE MARGINS NO ONE'S WILLING TO SAY 1970'S BUT THEY SEE IT IN SOFTER WAYS. HOUSING PRICES TICKING UP WE ARE CONCERNED ABOUT THE BOTTOMING OUT OF THIS COMMODITY CYCLE. WE HEAR ABOUT ON THE MARGINS. IT BASICALLY EXPOSES YOU. >> ARE YOU SAYING YOU RECEIVE SOME OF THE CRITICISM YOURSELF? LISA: NO ONE HAS EVER ACCUSED ME . SKEPTICAL OF THE WORLD. JONATHAN: EQUITIES JUST ABOUT POSITIVE BY .1%. HERE'S YOUR BLOOMBERG BRIEF WITH

DANI BURGER. DANI: THE U.S. FEDERAL TRADE COMMISSION HAS SUED TO BLOCK THE KROGER TAKEOVER OF ALBERTSON. THEY ARE ARGUING IT WOULD ILLUMINATE COMPETITION AND LEAD TO LOWER WAGES AND HIGHER FOOD PRICES. IT WOULD BE THE BIGGEST U.S. GROCERY DEAL IN HISTORY. KROGER AND ALBERTSON WOULD HAVE 5000 STORES ACROSS THE COUNTRY. ONLINE TRAVEL COMPANY ATTEMPTS TO REVIVE GROWTH AND REGAIN MARKET SHARE. THE SEATTLE-BASED FIRM WILL CUT ABOUT 1500 JOBS ACROSS THE GLOBE WITH SOME AFFECTED EMPLOYEES NOTIFIED ON M

ONDAY. EARLIER THIS MONTH ISSUED A WEAKER THAN EXPECT THAT OUTLOOK FOR THE QUARTER. IT ALSO ANNOUNCED A LEADERSHIP SHAKEUP. ALPHABET SHARES FELL MOST 4.5% ON MONDAY AMID FEARS THE GOOGLE OWNERS MISSTEPS -- MISSED STEPS. THE COMPANY PAUSE THE GOOGLE IMAGE GENERATION FEATURE AFTER CONCERNS OVER INACCURATE DEPICTIONS OF RACE. THEY MAY FUEL A PERCEPTION THEY ARE IN UNRELIABLE SOURCE FOR AI AND MAY CREATE AN OPENING FOR COMPETITORS. >> SO MUCH TO SAY, ARE THEY PUTTING IDEOLOGY BEFORE FACTS AT GOOGLE.

IT'S A BIG QUESTION. ANOTHER GOVERNMENT SHUTDOWN DEADLINE FAST APPROACHING. >> A PARTIAL LAPSE IN GOVERNMENT FUNDING. >> EVEN A PARTIAL SHUTDOWN WOULD MEAN CHAOS AND PAIN FOR THE AMERICAN >> LIVE FROM NEW YORK -- AMERICAN PEOPLE. JONATHAN: LIVE FROM NEW YORK CITY, GOOD MORNING. ♪ JONATHAN: LIVE FROM NEW YORK CITY, EQUITY FUTURES ON THE S&P 500 ON THE S&P AFTER THREE DAYS OF GAINS WE SNAP DOWN YESTERDAY IN THE EQUITY MARKET. YIELDS ARE LOWER. UNDER SURVEILLANCE THIS MORNING, ANOTHER GOVERNMENT S

HUTDOWN FAST APPROACHING. >> THE DEADLINE TO AVOID A PARTIAL LAPSE IN GOVERNMENT FUNDING IS FAST APPROACHING. THAT ACTION BY FRIDAY -- WITHOUT ACTION BY FRIDAY THEY WILL FACE NUMEROUS DISRUPTIONS. >> WE WANT TO AVOID A GOVERNMENT SHUTDOWN AND WORK WITH TO SPARE THE AMERICAN PEOPLE OF THE PAIN THAT A SHUTDOWN WOULD BRING. WOULD BRING CHAOS AND PAIN FOR THE AMERICAN PEOPLE. >> PRESIDENT BIDEN MEETING WITH CONGRESSIONAL LEADERS AT 11:30 TODAY TO MAKE A DEAL WITH YOU LOOMING GOVERNMENT SHUTDOWN. THE

NEXT DEADLINE IS MARCH 8 WHEN A FULL SHUTDOWN WILL TAKE PLACE. THE WHITE HOUSE MEETING WILL SHOW WASHINGTON DOESN'T WANT TO BE FISCALLY RESPONSIBLE AND IS PAYING NO ATTENTION TO INCREASED MARKET CONCERN AND DISMAY ABOUT THE UNITED STATES IS FISCALLY UNSUSTAINABLE PATH. TERRY, WHAT ARE THE ODDS WE AVOID ASSERT -- SHUTDOWN AND THE SPEAKER KEEPS HIS JOB. >> THE ODDS WE AVOID A SHUTDOWN IN THE SHORT TERM ARE PRETTY GOOD. I THINK WHAT ENDS UP HAPPENING HERE IS THEY KICK THE CAN FOR A WEEK OR TWO WIT

H SOME MORE TEMPORARY SPENDING TO WORK OUT PROBLEMS PRAYED THERE'S ALSO THE OPTICS EVEN FOR THE REPUBLICAN PURISTS WHO ARE CHARGING A LOT OF THIS, THE OPTICS OF HAVING A GOVERNMENT SHUTDOWN EITHER RIGHT BEFORE RIGHT AFTER THE STATE OF THE UNION ADDRESS. I HAVE NO DOUBT THE OPTICS ARE TERRIBLE REPUBLICANS WHO ARE THOUGHT BY THE PUBLIC TO HAVE A BETTER ECONOMIC HANDLE THAN THE BIDEN DEMOCRATS. SO THIS IS CAN A BUMBLE ON FOR A MONTH OR MORE. WITH THE IDEA BY APRIL 30 THE MANDATORY 1% CUTS IF THEY C

AN COME TO A DEAL SO THE SAME REPUBLICANS THINK THEIR LEVERAGE GROWS. >> HOW MUCH DO WE END UP AT APRIL 30 AND THEN GET THIS 1% CUT ACROSS THE BOARD AND I GUESS FOR THE REPUBLICANS THEY DON'T GET SOME OF THE POLICY RIDERS THEY WANT IN TERMS OF THESE PROVISIONS BUT THEY GET THE CUTS. WITH THAT BE A WIN FOR THEM. >> SOME OF THEM WOULD SEE IT THAT WAY. BUT ALSO WHAT I WOULD SAY FOR MARKETS CONCERNED ABOUT DOWNTURNS IN DEFENSE SPENDING FOR EXAMPLE IS YOU'LL HAVE A 1% CUT OF COURSE. WHAT YOU END UP W

ITH HER SOME KIND OF EXEMPTIONS OR WORKAROUNDS SO THE DEFENSE SPENDING DOESN'T GO DOWN. WHAT YOU'RE GOING TO GET IS KIND OF A MODEL FOR THE NEXT SIX TO SEVEN WEEKS AND A HODGEPODGE OF RESULTS. >> WHAT YOU THINK WE GET OUT OF THIS MEETING TODAY? HAVING LEGISLATIVE LEADERS OVER THE WHITE HOUSE. THE SHUTDOWN IS MIDNIGHT ON FRIDAY. IS IT TOO LATE? >> I THINK LIKE MOST THINGS IN POLITICS AND MANY THINGS IN MARKETS IN LIFE A LOT OF ITS POSTURING. BIDEN WANTS TO BE SEEN AS DOING SOMETHING AS A PREVIEW

TO THE STATE OF THE UNION. I THINK YOU GET MIXED RESULTS FROM MARKETS. YOU GET A PLUS ON FOREIGN AID IN U.S. GLOBAL LEADERSHIP. WITH THE EXCEPTION OF HOUSE SPEAKER JOHNSON YOU WILL SEE A VAST MAJORITY OF CONGRESS FOCUSED ON THE PUSHING TO THE INDO PACIFIC. A FEW OF THE NEGATIVES OF THE SHUTDOWN FOR MARKETS FOR THE FISCAL REASONS I MENTIONED. LISA: IS THIS SOMETHING MARKETS WILL WAKE UP TO OR IS THIS SOMETHING NO ONE ASKS YOU ABOUT BUT YOU'LL HAVE TO KEEP IN EYE OUT FOR. >> 15 OR 20 YEARS OF THIS

, INSIDE THE BELTWAY IT'S THE USUAL TOWEL SNAPPING WHO SAID WHAT TO WHO KIND OF STUFF. MARKETS REALLY DON'T CARE ABOUT THIS. THEY WILL START TO CARE IF IT STARTS TO AFFECT THE DEFENSE SUPPLY CHAIN REAL-TIME ISSUES. BUT MARKETS ARE IN ON THE JOKE AND HAVE BEEN FOR SOME TIME. THEY KNOW WHAT WILL END UP HAPPENING IS WASHINGTON WILL BACKFILL THE WHOLE THEY CREATE. LISA: THERE MIGHT BE MORE OF A RESPONSE TO THIS ASPECT. PRESIDENT BIDEN SAYING THERE'S SOME SORT OF AGREEMENT TO PAUSE FIGHTING IN GAZA.

HE WAS SAYING MY NATIONAL SECURITY ADVISOR TELLS ME WE ARE CLOSE, MY HOPE IS BY NEXT MONDAY. WITHOUT HAVE A MATERIAL EFFECT. DOES THAT MEAN SOMETHING TO YOU IN CONCRETE TERMS? >> THE PRESIDENT WANTS TO CONTINUE TO LOOK RELEVANT IN THOSE NEGOTIATIONS AND IN THE MIDDLE EAST GENERALLY IN THE RUN-UP TO THE MICHIGAN PRIMARY MORE THAN ANYTHING ELSE. IT'S NOT LOST ON ANYBODY DOWN HERE THE REASON WHY HE SAYS THIS THE DAY BEFORE THE PRIMARY IS TO HEAD OFF A PROBLEM WITH GETTING LARGE NUMBERS OF UNCOMMITT

ED VOTES. IN THAT PRIMARY. THAT MIGHT MAKE HIM LOOK WEAK OR CAST ASPERSIONS ON THE ADMINISTRATION'S MIDDLE EAST POLICY. >> WHAT IS THE BAR FOR THE PRESIDENT AND THAT PRIMARY? WHAT TO SUCCESS OR FAILURE LOOK LIKE. >> OBVIOUSLY HE'S GOING TO WIN BUT I WOULD SAY IF YOU GET UNCOMMITTED VOTES IN DOUBLE DIGITS BY WHICH I MEAN DOUBLE DIGITS, 10% OR MORE IS GOING TO LOOK LIKE THE WHITE HOUSE IS WEAK IN TERMS OF ITS CORE VOTERS FIRST OF ALL. AND SECONDLY THAT IT'S NOT MESSAGING. NORMALLY I GIVE THE BACK

OF MY HANDS TO MESSAGING CONCERNS AS SECONDARY BUT IN THIS CASE WHAT THE WHITE HOUSE NEEDS TO DO IS FORTHRIGHTLY TELL THE PUBLIC AND TELL THEM REPEATEDLY WHAT WE ARE FOR, WHY WE ARE FOR IT AND WHAT WE ARE DOING ABOUT IT. THIS PRESIDENT COULD DO WITH A LITTLE LESS BOX TICKING FOR ALL THE COALITIONS A LITTLE BIT MORE STANDING FIRM AND TELLING PEOPLE WHY WE ARE DOING WHAT WE ARE DOING. ANNMARIE: THESE UNCOMMITTED VOTES WHICH THE GROUP IS TRYING TO GET TO THE MARGIN IN 2016, WHEN YOU LOOK OUT TO NOV

EMBER POTENTIALLY THEY COME OUT AND VOTE FOR BIDEN. HOW MANY CAN HE LOSE IN THIS ARAB AMERICAN COMMUNITY AND GET ACROSS THE FINISH LINE. >> I THINK PROBABLY QUITE A LOT. THERE'S NO SERIOUS OPPOSITION IN THE PRIMARY. MICHIGAN IS ALWAYS CONSIDERED A SWING STATE AND YOU HAVE DONE SOME VERY GOOD REPORTING ON THE IDEA TRUMP VOTERS TEND TO COME FROM TRADITIONAL DEMOCRAT MIDDLE-CLASS HOUSEHOLDS. AT THE SAME TIME I THINK FIRSTLY THERE WILL BE A BIG BIDEN GET OUT THE VOTE EFFORT. SECONDLY THE CALL ON TRU

MP CONTINUES TO BE THAT HE IS WEAK BECAUSE HE'S NOT CONSOLIDATING THE PARTY BEHIND HIM AND HE'S LOSING A LOT OF INDEPENDENT VOTERS. SO I THINK THEY COULD STAND TO LOSE A FAIR NUMBER OF ARAB AMERICAN VOTERS IN THE FINAL ANALYSIS AND STILL PULL THROUGH. JONATHAN: THE WEAKNESS, THE PERCEIVED WEAKNESS OF THE FORMER PRESIDENT GOING TO THE NATIONAL LEVEL WITH THAT REINFORCED BY SOUTH CAROLINA OVER THE WEEKEND. >> I THINK WHAT YOU END UP SEEING IS A PARTY SPLIT SOMEWHERE IN THE 5050 TO 6040 LINE EVEN I

N A STRONGLY TRUMP PLACE LIKE SOUTH CAROLINA YOU COULDN'T GET TO 60%. BUT HE COULDN'T GET TO 60%. AND I THINK THAT CARRIES THROUGH BOTH IN TERMS OF REPUBLICAN VOTERS, REPUBLICAN GRANDEES INCLUDING PEOPLE THAT SERVED HIS FIRST ADMINISTRATION STRONGLY AGAINST HIM AND WILL SAY SO REPEATEDLY. AND THEN YOU HAVE THE PROBLEM WITH THE INDEPENDENCE. HE KNOWS HE IS WEAK. ONE OF THE MANY REASONS YOU CAN SEE THAT IS HOW QUICKLY HE CAME OUT ON IVF. HE SEEKING TO SEPARATE HIMSELF FROM THE PARTY ON THAT AND TR

Y TO MAKE A RUN WITH INDEPENDENCE. WHO HAVE PROBABLY MADE UP THEIR MINDS AGAINST HIM ANYWAY. JONATHAN: GOOD TO CATCH UP. ON THE SURFACE IT LOOKS DOMINANT . TALKING ABOUT DOUBLE DIGIT WINS IOWA, NEW HAMPSHIRE, SOUTH CAROLINA. YOU GET INTO THE NUANCES, TERRY'S VIEW, IT'S NOT THAT DOMINANT. ANNMARIE: WHEN YOU LOOK AT REPUBLICANS WHO LEAN A LITTLE MORE INDEPENDENT OR IF IT'S AN OPEN PRIMARY, THEY WANTED ALTERNATIVE. TRUMP IS JUST THAT 60% IN SOUTH CAROLINA. THAT'S CLOSER TO 15% AND 100%. HE HAS THE

BASE. I THINK WHAT PRESIDENT BIDEN IS GOING TO SHOW POTENTIALLY TODAY WITH THESE UNCOMMITTED PROTEST VOTE LET'S SEE WITH THE NUMBERS SHOW IS THEY NEED TO DO MORE TO SHORE UP THEIR CORE VOTING BASES THEY HAD IN 2020. JONATHAN: EQUITY FUTURES ON THE S&P 500 SLIGHTLY POSITIVE UP BY .1% ON THE S&P 500. COMING UP U.S. REGULATORS ISSUING A SCALING ASSESSMENT OF BOEING'S SAFETY CULTURE FOLLOWING THE NEARLY CATASTROPHIC INCIDENT EARLY THIS YEAR. THAT CONVERSATION FROM NEW YORK. THIS IS BLOOMBERG. JONATH

AN: SNAPPED A THREE-DAY WINNING STREAK ON THE SESSION. SMALL DAY OF LOSSES, UP BY .1%. UP BY 1.5% ON THE NASDAQ. WE HAD LOWS A LITTLE BIT EARLIER. WE HAVE MORE LATER THIS HOUR AND WE WILL BREAK THAT DOWN FOR YOU. TWO-YEAR, 10 YEAR, 30 YEAR. A TON OF ISSUANCE LATER TODAY. YIELDS WERE PUSHING HIGHER THROUGH THE CURVE. DOWN ABOUT TWO OR THREE BASIS POINTS THERE ON A 10 YEAR YIELD. BASICALLY UNCHANGED. IT'S NOT JUST TREASURY SUPPLY ALSO NEED TO CAUGHT -- TALK CORPORATE CREDIT SUPPLY. WHAT A MONTH IN

FEBRUARY. >> IT'S BEEN A RECORD ACROSS THE BOARD. YOU'RE LOOKING AT SOME OF THE LOWER RATED COMPANIES AS WELL THAT ARE ISSUING DEBT AND SPREADS ARE STILL AT THE TIGHTEST LEVEL GOING BACK FOR A YEAR. YOU CAN BASICALLY INFER ALL THAT CASH ON THE SIDELINES PEOPLE KEEP TALKING ABOUT IS GOING SOMEWHERE. MAYBE THIS IS THE HAVEN. JONATHAN: THE BUSIEST MONTH GOING BACK TO APRIL OF 2020. IT WAS A DIFFERENT WORLD, RUSHING TO ISSUE DEBT, SPREADS OF GAPPED WIDER OFF THE BACK OF THE PANDEMIC. ISSUING DEBT F

OR SURVIVAL FOR THE PURPOSES OF SURVIVING THROUGH THE SHUTDOWN AND HERE WE ARE A FEW YEARS LATER TALKING ABOUT SPREADS BEING INCREDIBLY TIGHT. EVEN WITH RATES AT MULTI-DECADE HIGHS WITH NO SIGN AT LEAST IN THE NEXT SEVERAL MONTHS GOING THROUGH JUNE AND THIS FED ITCHING TO CUT RATES ANYTIME SOON. >> IN APRIL OF 2020 IRIDESCENT WAS A FEELING THE FED HAD YOUR BACK. EVEN THOUGH SPREADS WERE WIDER, THE BORROWING COST WAS ROCK-BOTTOM. NOW WE ARE TALKING ABOUT COMPANIES WITH THE BORROWING COSTS EVEN WI

TH TIGHT SPREADS ARE NOT THAT LOW RELATIVE TO WHERE THEY HAD BEEN WRITTEN HISTORICALLY. COMPANIES CAN STILL ISSUE DEBT. INVESTORS SAYING YOU LOOK AT CREDIT MUCH MORE THAN YOU DID BEFORE. THIS IS THE MOST BULLISH MARKET CONSIDERING WHERE WE CAME AND HOW MUCH PEOPLE WERE PESSIMISTIC. >> THIS ONE'S DIFFERENT TO WHERE WE WERE FOUR YEARS AGO. I'LL DO MY BEST YEAR TO MAKE FOREIGN-EXCHANGE INTERESTING FOR YOU. I'VE GOT STUFF TO STAY AS WELL. I WILL SAY MY STUFF AND YOU CAN SAY YOUR STUFF AND JUST A MOM

ENT. THE EURO IS UNCHANGED, IT COULD GET INTERESTING. THIS IS WHAT HE'S GOT TO SAY ABOUT IT WHETHER THE FEDERAL ECB CUTS FIRST OR FASTEST WILL DETERMINE WHERE EURO-DOLLAR GOES THIS YEAR BUT THAT -- BUT IF THEY MOVE IN THE SAME DIRECTION THEY CAN GO VERY FAR IN EITHER DIRECTION. IF IT WERE TO BECOME CLEAR IN THE MONTHS AHEAD THE FED'S NEXT MOVE WOULD BE A HIKE OR THE SEABEES WOULD BE TO CUT RATES AND THE MARKET REACTION WOULD BE SUBSTANTIAL AND RETURN TO PARITY. WOULD DEMAND A PAINFUL REVISION TO

OUR FORECAST ON THE EURO. THAT'S ALL I CAN DO WITH THAT. DOLLAR-YEN. THE BOJ HAS EVERYTHING HE NEEDS RIGHT NOW. >> WE SAW HIGHER-THAN-EXPECTED INFLATION IN JAPAN. WHAT YOU'RE SEEING RIGHT NOW ARE TWO-YEAR YIELDS IN JAPAN AT THE HIGHEST LEVELS GOING BACK TO 2011. THIS STATISTIC GOT MY ATTENTION. THE LIKELIHOOD OF THE BANK OF JAPAN EXITING ITS NEGATIVE RATES BY APRIL HAS RISEN TO ABOUT 81%. THAT IS THE EXPECTATION BAKED INTO MARKETS. THE FACT THE CURRENCY IS MOVING AS LITTLE AS IT IS SHOWS HOW MA

NY PEOPLE HAVE BEEN BURNED BY THIS. >> ON THE EDGE OF EXCITEMENT IN THE FX MARKET JUST GETTING A REPORT FROM OUR TEAM AT BLOOMBERG WE OBTAIN THE DRAFT COMMUNIQUE OF THE FINANCE CHIEF, THIS IS THE G20 GET TOGETHER IN LATIN AMERICA. THEY SAY IT INCLUDES FASTER THAN EXPECTED DISINFLATION, THE LIKELIHOOD OF A SOFT LANDING IN THE GLOBAL ECONOMY HAS INCREASED. WHO ARE WE THANKING HERE. I DON'T THINK WE ARE THANKING EUROPE AND WE'RE CERTAINLY NOT THANKING CHINA EITHER. MAYBE CHINA WE ARE THANKING FOR T

HE INFLATION. THE GROWTH STORY LOOKS STATESIDE. >> BASICALLY THANK YOU TO CHINA FOR THE DISINFLATION IN COMMODITIES AND THANK YOU TO THE U.S. FOR THE ENGINE OF GROWTH. IT IS NIRVANA BUT PEOPLE ARE GETTING NERVOUS. MAYBE GETTING A LITTLE BIT AHEAD OF OURSELVES. >> THERE'S TWO HOT WARS RIGHT NOW AND YET BRENT IS STILL AT $82 A BARREL. THIS ALL HAS TO DO WITH CHINESE DEMAND WHICH IS NOT COME BACK SINCE THE DEPTH OF THE PANDEMIC. >> THAT'S THE OUTLOOK FOR THE G20. THE LATEST DRAFT COMMUNIQUE MOMENTS

AGO. PRESIDENT BIDEN EXPECTING A DEAL FOR A CEASE-FIRE BETWEEN ISRAEL AND HAMAS TO START HIS SOON AS MONDAY. DISCUSSIONS OF INTENSIFIED FURNITURE WHICH WOULD SECURE THE RELEASE OF MORE HOSTAGES HELD IN GAZA. ISRAELI OFFICIALS CONTINUE TO SAY THEY ARE LAUNCHING OFFENSIVES NEAR THE BORDER WITH EGYPT SOON. NETANYAHU HAS SAID THEY ARE MAKING DELUSIONAL DEMANDS SO WHY IS THE PRESIDENT CONSTRUCTIVE HERE WHEN ULTIMATELY WHAT YOU HEAR FROM THE ISRAELI LEADER IS LESS ENCOURAGING. >> WHAT DID WE JUST HEA

R THAT THIS IS VERY DELIBERATE AHEAD OF THE ELECTION CONSIDERING THE FACT IT HAS I BELIEVE THE BIGGEST CONCENTRATION OF AN ARAB-AMERICAN POPULATION IN THE NATION. ANNMARIE: MORE THAN 100,000 ARAB AMERICANS VOTED IN 2020 AND TODAY'S GOOD TO BE EVERY -- A PROTEST VOTE. THEY MAY BE USING FOREIGN POLICY TO SHORE UP THESE CRITICAL BASES IN THE DEMOCRATIC PARTY BUT ALSO THE PRESIDENT JOINED SETH MEYERS LAST NIGHT AFTER HE WAS WALKING AROUND EATING ICE CREAM WITH HIM TALKING ABOUT CEASE-FIRE AND SAID R

AMADAN IS COMING UP AND THERE'S BEEN AGREEMENT THEY WILL NOT ENGAGE IN ACTIVITIES DURING RAMADAN AS WELL. BASICALLY I THINK WE HAVE MONDAY TO SUNDAY OF NEXT WEEK IF AN AGREEMENT WERE TO HAPPEN FOR A HOSTAGE DEAL IT >> WOULD BE WITHIN THOSE DAYS. DON'T TALK ABOUT CEASE-FIRE'S. JUST DON'T DO IT. YOU KNEW WHAT KIND OF QUESTIONS YOU WOULD BE ASKED. DON'T BE IN THAT KIND OF SITUATION. DON'T ANSWER QUESTIONS ABOUT THE WAR HOLDING AND ICE CREAM. >> THERE HAVE BEEN A LOT OF QUESTIONS. LISA: AT SOME POIN

T THIS IS WHY YOU HAVE PEOPLE AROUND YOU THE TRY TO CRAFT A MESSAGE. LET MY PEOPLE TRYING TO CRAFT MY MESSAGE EVERY DAY. >> WE ARE HERE TO PROTECT YOU. THE OPTICS ARE DREADFUL. LISA: THEN AND ASK THEM A QUESTION THEY WANT TO BE ASKING ALL DAY. >> AND THE HANDLERS SHOULD KNOW THAT SO DON'T PUT THEM IN THE SITUATION WHILE HE'S EATING AN ICE CREAM ANSWERING QUESTIONS ABOUT THE WAR IN THE MIDDLE EAST ESPECIALLY WHEN YOU KNOW THEY'VE GOT SOMETHING TO SAY AS WELL. THE FEDERAL TRADE COMMISSION SUING TO

BLOCK ONE OF THE BIGGEST U.S. GROCERY DEALS IN HISTORY. THE COMPLAINT SAYING KROGER'S PURCHASE OF ALBERTSONS WOULD LEAD TO LOWER WAGES FOR WORKERS IN HIGH FOOD PRICES TOGETHER THE COMPANIES WOULD OWN 5000 STORES ACROSS THE COUNTRY. THE SUPER MARKET SHARE SAYING THE DEAL IS NEEDED TO COMPETE WITH AMAZON, WALMART AND COSTCO. THEY FIRST ANNOUNCE THE AGREEMENT IN LATE 2022 AND THERE IS NO END IN SIGHT TO THE SAGA. >> THEY WANT TO HEAR ABOUT CAPITAL AND UNDERSTAND WITH THE POTENTIAL IS ELSEWHERE. TH

EY KEEP GOING BACK TO THE CASH FILE -- CASH PILE AT BERKSHIRE HATHAWAY. IT IS WHERE ARE YOU GOING TO GO. WHAT CAN YOU BUY. IS IT GOING TO BE MORE, AND DAY OVERSEAS EVEN IN THE UNITED STATES BECAUSE IF YOU'RE TOO BIG THE ANSWER IS NO. >> YOURSELF IS THE ANSWER APPARENTLY. IF YOU HAVE THAT MUCH MONEY A LOT OF THE BIG TECH FIRMS, WHAT CHOICE DO THEY HAVE. THEY COULD BUY CHIPS FROM NVIDIA OR THEY COULD BUY THEMSELVES. >> IT'S A WONDERFUL WAY OF PUTTING SHARE BUYBACKS IN PURCHASES. JONATHAN: WHAT'S T

HE [LAUGHTER] LATEST ON THAT? [LAUGHTER] U.S. REGULATORS ISSUING A SCATHING REVIEW OF BOEING AS IT CONTENT -- THE FALLOUT CONTINUES FROM THE MIDAIR BLOWOUT LAST MONTH. THE FAA SAYS THEY HAVE INEFFECTIVE SAFETY PROCEDURES AND SUFFERS FROM MEDICATION BREAKDOWNS BETWEEN STAFF. SAYING THEY WILL CAREFULLY REVIEW THE PANELS ASSESSMENT AND LEARN FROM THEIR FINDINGS AS WE CONTINUE A CONFERENCE OF EFFORTS TO IMPROVE OUR SAFETY AND QUALITY PROGRAMS. BROOKE, YOU ARE NOT GETTING COMBATIVE BY BOEING PRAY THE

Y ARE LISTENING AND KNOW THEY HAVE TO FIX IT. YOU CAME OUT EARLIER IN TALKED ABOUT THE CULTURE. THAT SOMETHING WAS WRONG WITHIN THIS COMPANY. WHAT ARE WE LEARNING FROM THE REGULATOR AND THE PEOPLE CONDUCTING THIS REVIEW. >> TO YOUR POINT THEY ARE SAYING THE RIGHT THINGS NOW BUT IT WOULD HAVE MEANT MORE IF THEY HAD BEEN SAYING THIS EARLIER. THEY HAD PLENTY OF OPPORTUNITY TO DO THAT IN THE WAKE OF THE CRASHES. WHAT'S IMPORTANT TO NOTE IS THIS REPORT WAS IN MARCH OF 2023. THEY DID NOT START THIS IN

VESTIGATION BECAUSE OF WHAT HAPPENED WITH ALASKA AIRLINES. THAT WAS A SYMPTOM OF A CULTURE THAT'S LACKING. THE CRUX OF THIS IS HOW DO YOU FIGURE OUT HOW TO GET BAD NEWS TO THE PEOPLE THAT CAN DO SOMETHING ABOUT IT. HOW DO YOU FLAG PROBLEMS BEFORE YOU HAVE SOMETHING LIKE ALASKA AIRLINES HAPPEN. THIS GOES BACK TO THE BASICS OF HOW YOU RUN A MANUFACTURING COMPANY. IT SHOULD NOT BE THAT HARD BUT I THINK IN PRACTICE IT IS. NOT JUST FOR BOEING BUT FOR OTHER COMPANIES THAT HAVE LOST SIGHT OF WHAT THEY

REALLY DO AND THAT IS MANUFACTURE PRODUCTS. I THINK ABOUT GE A LOT BECAUSE THEY DO SHARE SO MUCH OVERLAP FROM EXECUTIVES OVER THE YEARS. YOU LOOK AT THE TRANSFORMATION OF THAT COMPANY AND THE CEO IS KNOWN FOR BEING EXTREMELY HANDS-ON, FOR BEING VERY INVESTED IN WHAT HAPPENS ON HIS FACTORY FLOORS. AT BOEING DAVE CALHOUN IS KNOWN FOR BEING MORE HANDS-OFF. I DON'T KNOW IF THAT'S WHAT THEY NEED RIGHT NOW. I THINK YOU NEED SOMEONE TO GET IN THERE AND PAY ATTENTION TO WHAT'S HAPPENING AT THE MANUFACTU

RING PROCESSES. BECAUSE THE PEOPLE OF THE FACTORIES PAY ATTENTION TO THAT, WHAT THE EXECUTIVES ARE SAYING AND DOING. WHEN YOU MOVE YOUR HEADQUARTERS TO ARLINGTON, VIRGINIA EVEN FURTHER AWAY FROM THAT 737 FACTORY I THINK THAT SENDS A MESSAGE. JONATHAN: TELL US ABOUT THE CHANGES THAT HAVE HAPPENED AND THE CHANGES YOU ANTICIPATE TO HAPPEN IN THE WEEKS AND MONTHS. >> THERE'S BEEN A NUMBER OF CHANGES. IF YOU LOOK OVER THE TIME PERIOD WE'VE SEEN A REVOLVING DOOR OF EXECUTIVES AND YET I STILL DO NOT FE

EL LIKE AND IF YOU LOOK AT THIS REPORT THAT THEY HAVE THEIR HANDS AROUND WHAT EXACTLY IS WRONG. PART OF IT JUST TO GO BACK TO YOUR INITIAL POINT, THEY ARE SAYING THE RIGHT THINGS NOW BUT WE HAVE NOT HEARD FROM BOEING MANAGEMENT WE HAVE A CULTURE PROBLEM. THEY HAVE BEEN VERY RELUCTANT TO SAY THIS IS SOME SORT OF SYSTEMIC ISSUE. THE REASONS FOR THAT ARE PERHAPS OBVIOUS WHEN WE TALK WITH ANALYST INVESTORS BUT ADDRESSING THIS PROBLEM STARTS WITH CALLING IT OUT AND ACCEPTING IT AND BEING WILLING TO G

ET YOUR HANDS DIRTY AND FIGURE OUT HOW YOU SOLVE THIS. LISA: REGULATORS SEEM TO HAVE ATTEMPTED HERE CONSTANT CHANGES TO COMPLEX PROCEDURES LEADING TO CONFUSION. OTHERS HINTED -- HINDERED IN THEIR ROLE OF HOW THEY MANAGE SAFETY. THIS IS PRETTY BASIC. REGULATORS REQUESTED INFORMATION THAT BOEING DEMONSTRATE COMMITMENT TO SAFETY BECAUSE THE MATERIALS RECEIVED DID NOT PROVIDE OBJECTIVE EVIDENCE OF THE FOUNDATIONAL COMMITMENT TO SAFETY. THE HEAD OF THE COMPANY WARY OF THIS KIND OF SCATHING DESCRIPTIO

N FROM U.S. REGULATORS TRYING TO UNDERSTAND WHY THERE HAVE BEEN REPEATED ERRORS AND INCIDENTS. BROOKE: I THINK YOU HAVE TO THINK ABOUT THE INCENTIVES OF THE DIFFERENT PLAYERS. WHAT MAKES THEM SO UNIQUE IS THAT EXISTS IN A DUOPOLY THAT YOU ARE NEVER REALLY GOING TO HAVE THE TYPE OF ACCOUNTABILITY AT BOEING YOU MIGHT HAVE ANOTHER COMPANY SIMPLY BECAUSE THE WORLD CANNOT EXIST WITH JUST AIRBUS AIRPLANES. YOU HAVE SOME PLANES COMING OUT OF CHINA WHICH HAVE A PRETTY IMPRESSIVE SHOWING AT THE DUBAI AIR

SHOW BUT YOU ARE NEVER GET TO SEE THE WESTERN WORLD BY THOSE PLANES. AND WE CANNOT LIVE IN A WORLD WHERE THERE'S ONLY AIRBUS. YOU'VE SEEN CUSTOMERS COME OUT AND BE MORE AGGRESSIVE IN THEIR CRITICISM OF BOEING IN THE WAKE OF THE ALASKA AIRLINES. THEY ALSO WANT THEIR AIRPLANES. SO I THINK IT WILL BE INTERESTING TO SEE HOW MUCH PRESSURE THERE ULTIMATELY IS ON BOEING TO CHANGE ITS WAYS BECAUSE YOU COULD ARGUE IN THE WAKE OF THE INCIDENTS THERE WASN'T ENOUGH PRESSURE, CERTAINLY BOEING DIDN'T FEEL TH

AT. LISA: THE CEO WILL BE SITTING DOWN WITH THE HEAD OF THE FAA TODAY. DO YOU EXPECT ANYTHING TANGIBLE FROM THAT. BROOKE: IT WILL BE INTERESTING TO SEE HOW MUCH THEY SHARE ABOUT WHAT'S DISCUSSED IN THAT MEETING. IF DAVE CALHOUN WANTS TO SHOW HE'S TAKING THIS SERIOUSLY THEY SHOULD COME OUT WITH SOMETHING TANGIBLE AND IT NEEDS TO BE REAL. WE HEARD ABOUT CHANGES FROM BOEING AND WAYS IN WHICH THEY'VE IMPROVE THEIR SAFETY CULTURE. I THINK YOU NEED TO GET SPECIFIC AND TALK ABOUT HOW YOU'RE GOING TO AD

DRESS THESE ISSUES THAT WERE RAISED IN THE REPORT. I DON'T HOW MUCH THEY WILL ACTUALLY TALK ABOUT CHANGES THEY ARE MAKING OR WHAT WAS DISCUSSED. >> APPRECIATE THE UPDATE, THANK YOU FOR THE NOTICE. THE LATEST WITH BOEING. BUT SCHEDULE AN UPDATE ON STORIES ELSEWHERE. DANI: AFTER BLOOMBERG REPORTED CHARTER COMMUNICATIONS IS EYEING EIGHT TAKEOVER. SOURCES SAY CHARTERERS WORKING WITH FINANCIAL ADVISORS TO ASSESS THE DEAL. BOTH FIRMS ARE COPING WITH WIRELESS COMPETITION AND CORD CUTTING. ZOOM PERFORMI

NG BETTER SALES FROM CUSTOMERS. SALES GAINS 2.6%, AVENUE ENTERPRISE REVENUE WAS UP. ZOOM ANNOUNCED A $1.5 BILLION SHARE BUYBACK AFTER HYPER GROWTH DURING THE PANDEMIC, ZOOM HAS EXPERIENCED A DRAMATIC SALES SLOWDOWN. PRESIDENT BIDEN DEFENDED HIS MENTAL FITNESS IN AN APPEARANCE ON LATE NIGHT WITH SETH MEYERS. >> YOU HAVE TO LOOK AT THE OTHER GUY. HE CAN MEMBER HIS WIFE'S NAME. -- CANNOT REMEMBER HIS WIFE'S NAME. [APPLAUSE] AND NUMBER TWO IT'S ABOUT HOW OLD YOUR IDEAS ARE. DANI: BIDEN HAS BEEN TRAI

NED TO MEDIATE FEARS THAT HE IS UNFIT FOR A SECOND TERM. THREE QUARTERS OF VOTERS AND CLING HALF OF DEMOCRATS SAY THEY ARE CONCERNED ABOUT BIDENS AGE. LESS THAN HALF SAY THAT ABOUT TRUMP. >> MY BEST GUESS IS THERE WON'T BE A DEBATE GOING INTO THE ELECTION THIS YEAR BUT IF THERE ARE I THINK MAYBE THAT IS BASICALLY THE WARM-UP ACT. CAN YOU IMAGINE HOW DREADFUL IT IS PRETTY WANT TO HEAR POLICY. CAN YOU IMAGINE THE DEBATE IF THAT'S THE ROAD WE ARE GOING DOWN. AN EXCHANGE OF INSULTS. LISA: I THINK WE

ARE GOING TO BE SPARED FROM WHATEVER THAT WOULD LOOK LIKE BUT IT WOULDN'T BE ON HOW THEY REDUCE THE DEFICIT. JONATHAN: NEARLY ONE YEAR ON FROM SVB'S COLLAPSE. >> FOR INVESTORS RIGHT NOW, GROWTH IN BANKS HAS BEEN TAINTED WITH THE SILICON VALLEY FAILURE, SIGNATURE FAILURE. >> THAT'S COMING UP NEXT, LIVE FROM NEW YORK CITY THIS MORNING, GOOD MORNING. ♪ JONATHAN: EQUITY FUTURES ON THE S&P POSITIVE HEREBY .1% ON THE S&P 500. YIELDS LOWER BY A SINGLE BASIS POINT. A LITTLE BIT LATER ON THIS AFTERNOON

WE HAVE A LOT OF SUPPLY IN THE TREASURY MARKET IN THE LAST 24 HOURS. WE TALK ABOUT HOW WELL THAT'S BEEN TAKEN OVER THE LAST COUPLE OF DAYS. CREDIT SUPPLY HAS BEEN PHENOMENAL TAKING DOWN REALLY WELL. >> THE AUCTIONS YESTERDAY WERE FINE BUT CAME IN A LITTLE BIT WEAKER. >> UNDER SURVEILLANCE THIS MORNING FROM SVB'S COLLAPSE. >> INVESTORS RIGHT NOW GROWTH FROM BANKS HAS BEEN TAINTED WITH THE SILICON VALLEY FAILURE, A SIGNATURE FAILURE AS WELL AS FIRST REPUBLIC. OUR INVESTORS LOOK AT GROWTH IN THIS E

NVIRONMENT. 550 BASIS POINT MEGA FUND RATE AS A LITTLE BIT RISKY. AS WE ARE LOOKING FOR LOW GROWTH WE ARE STILL ARE OUT THERE MEETING OUR CLIENTS NEEDS AND PICKING UP MARKET SHARE. THE INVESTORS KNOW THAT. JONATHAN: THE KBW REGIONAL BANKING INDEX DOWN SO FAR THIS YEAR AS WE INCH CLOSER TO THE ONE-YEAR MARK OF SVB'S COLLAPSE. THE VICE CHAIR AND PARTNER WRITING RECENTLY IN THE FINANCIAL TIMES SAYING MANY OF THE ISSUES WAS LED TO SILICON VALLEY BANK'S FAILURE ARE LEFT UNADDRESSED IN THE FED'S PROPO

SED OFF THE NEW BANK REGULATION. GOOD MORNING TO YOU. LET'S TALK ABOUT THIS. WHAT SHOULD HAVE BEEN ADDRESSED, WHAT ISN'T BEING ADDRESSED AND WHAT VULNERABILITIES ARE LEFT FROM THE FIASCO OF A YEAR AGO. >> THERE ARE THREE KEY THINGS. FIRST WAS THE MISMATCH. TO BE HONEST THIS IS SOMETHING WE'VE SEEN IN THE 70'S, 80'S AND 90'S. INTEREST RATE RISK. AND THEN THE THIRD WAS DEPOSITOR CONCENTRATION. A NUMBER OF THESE VERY LARGE TICKET UNINSURED DEPOSITS. NONE OF THAT IN THE PROPOSALS IN FACT AND OF COUR

SE EVERY TIME I GO TO BANK -- I MEET A BANK CEO OR CFO, BASEL COMES UP. IT IS THOSE BASICS OF BANKING. THAT'S WHY THINK FOR THE REGIONAL BANKS IT'S PROBABLY A TWO TO THREE YEAR PERIOD TO READJUST AND THAT'S WHY THEY ARE HAVING SUCH A RIPE OPPORTUNITY. JONATHAN: CAN YOU FRAME FOR US HOW REGULATORY REGIMES ARE GOING TO EXACERBATE EXISTING TRENDS AND RESHAPE THE LANDSCAPE OF WALL STREET. CAN YOU GO THROUGH EACH PHASE FOR US? >> THIS IS THE THIRD OR FOURTH BIG WAVE AND NORMALLY WHAT YOU FIND IS YOU

NEED THREE THINGS. A BIG FINANCIAL SOCK -- SHOCKED, AND THEN YOU NEED THE REGULATORS TO JUMP AND TRYING TO TURBOCHARGE THAT. MONEY MARKET FUNDS WERE ONLY INVENTED 71. THAT TURBOCHARGED AND I THINK WHAT'S INTERESTING IS FOR THE FIRST TWO YEARS LISTENING TO PEOPLE PRAY UPON THE BANKS. WHEN YOU GET THE NEW RULES THE BANKS THEMSELVES START REINFORCING THAT. YOU SAW BIG WAVE OF CORPORATE LENS POST A FINANCIAL CRISIS WAS MORTGAGES AND MARKET-MAKING. NOW IT'S REALLY RUN MIDMARKET LANDING, WHERE I DON'T

THINK WE BREAK THROUGH THOSE, I THINK WE WILL MASSIVELY BREAKTHROUGH THAT GIVEN THE TRENDS WE ARE SEEING. >> LET'S TALK ABOUT THE ANATOMY OF THIS CREDIT DISINTERMEDIATION. IF THAT'S RESTRICTING THEIR ABILITY TO LEND. IS THAT WHAT YOU ARE SEEING THAT THESE PRIVATE CREDIT PROVIDERS ARE SAYING IF YOU CAN LEND WE WILL AND WE WILL PROVIDE THOSE LOANS. THE SMALL BANKS LOSE OUT. >> LET'S TAKE LAST YEAR. 80% OF LEVERAGE LOANS WERE FUNDED BY PRIVATE CREDIT RATHER THAN THE BANKS. THE LARGE BANKS ARE BACK

IN THE GAME. ONE OF THE LESSONS I LEARNED FROM THE FINANCIAL CRISIS IS BANKS CAN ONLY TAKE THE LOSSES THEY CAN AFFORD TO TAKE. SO THEY ARE HANGING IN HOPING FOR THE BEST AND THAT'S WHY IF YOU LOOK AT LENDING MARKET REGIONALS IT'S CONTINUED TO FALL. AND YOU SAW THAT THROUGH THE EARNINGS SEASON. AT THE MOMENT THEY ARE NOT SELLING THE COMMERCIAL REAL ESTATE SIZE. THEY'VE GOT FUNDING ISSUES, COMMERCIAL AND STATE WILL TAKE A COUPLE OF YEARS. >> WRITING ABOUT THIS IN A REPORT SAYING THE ODDS ARE THE

BANKS OFFICES STRESS IS FAR FROM OVER. E-CIG GIVES AN GROWTH OF LOANS. HOW MUCH SORT OF DEFAULT AND DISTRESS WILL WE SEE IN REGIONAL BANKS ON THE PATH GIVING OUT THE BAD STUFF. >> I THINK THERE'S POCKETS OF STRESS BUT I THINK ALSO THE REGULATORS ARE CLEARLY TRYING TO ENCOURAGE BANKS TO CONSERVE CAPITAL. CAP DIVIDENDS SO THEY CAN REBUILD. IT'S A REAL GRIND AND AS THEY GO THROUGH THE BEST CASE WE GET TONS MORE BANKS. IF WE GET ANOTHER SHOCK. I THINK IT'S REALLY HARD WORK AND IN THE MEANTIME IF YOU

'RE ONE OF THE TOP FIVE BANKS. I THINK THAT'S WHERE THE OPPORTUNITY THEY LOOK TO PRESS THE ADVANTAGE. JONATHAN: CAN WE TALK ABOUT HOW INVESTORS AND WHAT WE INVEST IN HAS TO CHANGE AS WELL. THE ECONOMIC FORUM ABOUT HOW INVESTOR FLOWS POLARIZE. THIS IS SOMETHING WE TALKED ABOUT AGES AGO. BENCHMARK RETURNS CHIEFLY. INVESTING ESPECIALLY IN PRIVATE ASSETS AND REAL ESTATE SPRAYED THIS TREND IS CLEARLY TAKEN HOLD. DO THINK THAT PROCESS IS LARGELY COMPLETE. >> YOUR VERY KIND TO REMEMBER A PIECE OF THIS.

SO FORGET ABOUT THEN FEES ON HEDGE FUNDS AND PRIVATE EQUITY. WE ARE UP 27% IN THE INDUSTRY. I SEE IT GOING WELL INTO THE 50'S. IT'S CLEAR WE ARE USING THE RISK BUDGET FOR INTERESTING RETURNS. PRIVATE CREDIT OFF THE RUN. WE SEE THIS WITH SOME OF THE LARGEST FIXED INCOME INVESTORS IN THE WORLD. THERE'S A SEED CHANGE TO CREDIT SO I THINK THERE'S A CONTINUATION OF THAT. ON THE OTHER END ETF'S REMAIN CHEAP AS CHIPS. PROBABLY FOR YOUR WORKOUT RATHER THAN MINE. >> I HAVE TO LOOK AT THIS AND TALK ABOUT

THIS, I THINK THERE CERTAIN MEDIA BUSINESS MEDIA STILL ACT LIKE IT'S THE 90'S. SINGLE STOCKS WHEN THE WORLD HAS CHANGED. THE WORLD IS CLEARLY CHANGED. THE WAY PEOPLE INVEST, THE DOW WAS A WEATHER FORECAST. I THINK A LOT OF PEOPLE UPDATING FINANCIAL MARKETS, WHAT DOES THAT ACTUALLY MEAN TO PEOPLE ANYMORE IF YOU'RE NOT EXPOSED TO IT. YOU NOT AT THAT INDEX AT ALL. >> RIGHT NOW WHAT YOU SEE IS IF THEY ARE SINGLE NAMES IT'S ABOUT THE TECHNICALS AS WELL UNDERPINNING IT BECAUSE OF THE ETF TRADING TRAD

E AS MUCH AS IT IS ABOUT THE ACTUAL COMPANY AND THEIR REVENUES. JONATHAN: SO GREAT TO SEE YOU. LET'S SET UP THE NEXT HOUR FOR YOU. WE CATCH UP AT TS LOMBARD. THE PRESIDENT AND CEO STEPHEN. LIVE FROM NEW YORK CITY THIS MORNING, EQUITY FUTURES POSITIVE BY .1% IN THE MARKET. ON THE 10 YEAR PAID A TON OF ECONOMIC DATA, CONSUMER CONFIDENCE AT 90 MINUTES AFTER THAT. FROM NEW YORK CITY THIS IS BLOOMBERG. >> THE OVERALL MARKET IS STILL OK. >> THE FED IS MORE LIKELY TO REMAIN ON THE SIDELINES RATHER THAN

RE-ENGAGING IN FURTHER RATE HIKES. >> THE LONGER THESE POLICY RATES STAY ELEVATED THE MORE THEY WILL BITE INTO THE ECONOMY. >> IF THERE IS A MEANINGFUL RUN IN GROWTH, I THINK IT WILL STILL HAVE THOSE RATES. >> IT MIGHT BE LOOKING AT NONE TO ONE. >> THIS IS BLOOMBERG SURVEILLANCE WITH JONATHAN FERRO, LISA ABRAMOWICZ AND ANNMARIE HORDERN. JONATHAN: LIVE FROM NEW YORK CITY THIS MORNING, GOOD MORNING. THIS IS BLOOMBERG SURVEILLANCE, A BIG MORNING FOR RETAILERS IN AMERICA. FREE-MARKET POSITIVE BY AR

OUND 3%. WE HAVE THE RESULTS OUTLOOK AND WE'VE GOT SOME STORE CLOSURES. LISA: TO ME WHAT'S INTERESTING IS THEY'RE GOING TO CLOSE THESE LOCATIONS. IT'S UNCLEAR HOW MANY WILL BE AFFECTED THROUGH 2026 BUT THEY ARE ADDING TO THE NUMBER OF OUTLETS. IF YOU LOOK AT UNDER THE HOOD YOU CAN SEE SAME-STORE SALES AT THE NAMESAKE BRAND FELL WHERE'S BLOOMINGDALE'S FELL AND BLUE MERCURY ROLES -- BLUE MERCURY ROSE. WEALTHY SHOPPERS HAVE MONEY TO SPEND PRAYED >> WE'VE SEEN A LOT OF ANALYSTS TALK ABOUT THE BIFURC

ATION OF THE CONSUMER. THOSE ON THE HIGHER END OF THE SOCIOECONOMIC SCALE. THEY ARE SPENDING ON LUXURY AND HAVE THIS DISPOSABLE INCOME WHILE THOSE ON THE LOWER END ARE FEELING THE BITE OF INFLATION. THIS PLAYS OUT PERFECTLY IN THE MACY'S STORY. THEY ARE LOOKING TO SOME OF THE HIGHER LUXURY PRODUCTS. JONATHAN: JUST ABOUT UNCHANGED. WE WILL TALK ABOUT THAT LATER. TAKE A LOOK AT ALPHABET IN THE PREMARKET TRADING POSITIVE ONE POINT 6% YESTERDAY NOT OK. SOMETHING LIKE 4% YESTERDAY THEY PAUSE THE IMAG

E GENERATION FOR ITS AI MODEL. GOOGLE HAS ABSOLUTELY DOMINATED SEARCH WHETHER THEY DOMINATE AI INFUSED SEARCH IS A DIFFERENT QUESTION BECAUSE THE EARLY PROGRESS, THERE IS NOT MUCH OF IT ALL. LISA: IT'S A CREDIBILITY GAME. BUT YOUR MODEL WILL GENERATE SOMETHING THAT HAS THE RESULTS PEOPLE ARE LOOKING FOR. IF THERE GEMINI OUTLET WAS ACCUSED OF A DIFFERENT BIAS, SOME PEOPLE SAY CREATING A WOKE KIND OF GEMINI OUTPUT, WHATEVER YOU WANT TO CALL IT. THE POINT IS ITS CREDIBILITY. AND THE QUESTION PEOPLE

CAN LOCK INTO THIS AND IT RAISES THE QUESTION OF ARE THE GOING TO LOSE FURTHER FROM MICROSOFT AS THEY COMPLAIN THEY ARE DOMINATING IN A MONOPOLISTIC WAY. JONATHAN: THE EXCUSE THEY'VE GIVEN, THE REASON THEY'VE GIVEN KIND OF MAKES SENSE THAT IF YOU ARE IN CHINA AND ASK FOR AN IMAGE OF A FOOTBALL TEAM THEN YOU MIGHT WANT SOME CHINESE PEOPLE IN THAT FOOTBALL TEAM. THAT SEEMS TO BE WHY THIS HAS HAPPENED. THAT'S THE REASONING FOR IT. WHEN YOU START GETTING PROMPTS LIKE NAZIS IN GERMANY IN THE 1930'S

AND YOU GET A DIVERSE SET OF CHARACTERS QUITE CLEARLY SOMETHING HAS GONE VERY WRONG. THE QUESTION IS HAVE THEY DELIBERATELY PUT IDEOLOGY BEFORE FACT AND IF THEY HAVE, HOW CAN YOU RELY ON SEARCH WITH GOOGLE. IF I PUT SOMETHING INTO GOOGLE SEARCH I WILL GET THE ANSWER THAT I'M LOOKING FOR. IF I CAN RELY ON THEM FOR THAT ANYMORE WHAT KIND OF BUSINESS DO THEY HAVE LEFT? LISA: I DO NOT HAVE INTIMATE KNOWLEDGE OF GEMINI. THAT SAID THERE IS A QUESTION ALL THE ARTIFICIAL INTELLIGENCE AND GENERATIVE AI T

YPES OF PLATFORMS. AND INHERENT BIASES THAT EVERYONE HAS AND HOW MUCH ARE THEY MAGNIFIED IN THE PROGRAM ANGLE OF SOME OF THESE GENERATIVE AI MODELS. DELIBERATE OR NOT, WHAT KIND OF EXPANSION OF THESE TECHNOLOGIES WILL THERE BE ON A FULL UNDERSTANDING OF HOW BIASES ARE IMPLEMENTED. ANNMARIE: NATE SILVER NAILS IT. THEY NEED TO SHUT IT DOWN BECAUSE IT SEVERAL MONTHS AWAY FROM BEING READY FOR PRIME TIME. WHY DID THEY RELEASE SOMETHING THAT WAS NOT READY. HE PUT THIS QUESTION IN IS WHO IS IMPACTED SO

CIETY MORE ELONG TWEETING -- TWEETING MEAT OR HITLER'S. GEMINI SAID IT'S NOT POSSIBLE TO SAY DEFINITIVELY TO YOUR POINT BUT HE SAID WHY ARE THEY MOVING AHEAD WITH SOMETHING THAT WAS NOT READY. >> WHEN IT WAS TESTED IN HOUSE WHERE THEY SATISFIED WITH THE ANSWERS THEY WERE GETTING. >> IT GOES TO THE POINT WHERE THEY ARE BANKING ON GENERATIVE AI CHANGING THE WORLD AND INCREASING PRODUCTIVITY BEFORE WE UNDERSTAND HOW RIGOROUS THE TESTING HAS BEEN. THIS GOES TO THE CONCERN THAT EVEN PEOPLE IN THE IND

USTRY ARE SAYING CAN WE PUT SOME GUARDRAILS ON IT. >> WE ARE TALKING ABOUT A COMPANY WITH A MONOPOLY BUSINESS. ULTIMATELY IN THE EQUITY BUSINESS THEY HAVE DOMINATED. I HAVE NO IDEA IF THIS PRODUCT WILL BE GOOD IN THE FUTURE. MAYBE IT WILL BE. BUT THE FACT OF THE MATTER IS WE ARE TALKING ABOUT ALPHABET BEING BEHIND IN SOMETHING THAT WE THINK THEY SHOULD BE DOMINATING AT. THIS IS A COMPANY THAT'S PERFECTLY SET UP TO DOMINATE THIS AND HAS NOT AT ALL. LISA: THIS IS THE REASON PEOPLE ARE GENUINELY WO

RRIED ABOUT A 1990'S TYPE TECH BUBBLE. YOU HAVE TO THINK SOME OF THE TECHNOLOGICAL ADVANCEMENT WILL BE SO TRANSFORMATIVE THAT IT WILL UP AND MODELS THAT HAVE BEEN SO DOMINANT. WE WERE TALKING ABOUT MICROSOFT AND THEIR GENERATIVE AI AND WHAT THEY CAN DO TO COMPETE WITH GOOGLE. JONATHAN: STOCK IS UP BY ONE HALF OF 1%. THE BROADER EQUITY MARKET, EQUITY FUTURES POSITIVE. IN THE BOND MARKET YIELDS, DOWN BY A SINGLE BASIS POINT. THE EURO SLIGHTLY STRONGER. COMING UP THIS HOUR SKYLER MONTGOMERY KOENIG

ON WHY STICKY INFLATION IS GOOD FOR STOCKS. AARON DAVID MILLER WITH A CEASE-FIRE IN ISRAEL GATHERING MOMENTUM AND THE CEO ON THE HEALTH OF THE U.S. CONSUMER. THE S&P 500 ENDING A THREE DAY STREAK AHEAD OF A SLOW DUTCH SALUTE OF ECONOMIC DATA AND FED SPEAK. POLICY IS NO LONGER THE ONLY MARKET DRIVER WITH EQUITIES NOW REACTING POSITIVE TO UPSIDE SURPRISES TO KEY ECONOMIC INDICATORS. WE REMAIN STICKY INFLATION MAY DELAY FED CUTS BUT AS LONG AS IT'S CAUSED BY DEMAND IT SHOULD BE GOOD FOR STOCKS. SCA

RLET DO YOU THINK THAT EXPLAINS WHY THIS EQUITY MARKET HAS BEEN ABLE TO PRICE OUT THE RATE CUTS AND FIXED INCOME AND ULTIMATELY CONTINUED TO RALLY SO FOUR-YEAR TODAY. SCARLET: WE HAD TWO QUARTERS OF POSITIVE EARNINGS GROWTH WHICH MEANS WE ARE PAST THE EARNINGS GROWTH WE SAW LAST YEAR. YOUR SEEING WE'LL -- REAL WAGE GAINS WHICH DON'T NECESSARILY HAVE TO BE MARRED IN CONTRACTION. SO THAT POSITIVE U.S. GROWTH COUPLED WITH FED CUTS WHICH WILL COME EVEN IF WE GET OF A SLOWDOWN MEANS YOU CAN HAVE A PR

ETTY POSITIVE OUTLOOK FOR EQUITIES. JONATHAN: YOU SAID MAYBE THE PAIN TRADE COULD BE WE DON'T GET THE RATE CUTS. WHAT DO YOU THINK THE PAIN TRADE IS NOW? SKYLAR: WE'VE MOVED QUITE SIGNIFICANTLY AND WHEN I TALK ABOUT THE PAIN TRADE AT THE BEGINNING OF THE YEAR NOT BEING THOSE RATE CUTS I DIDN'T MEAN SO MUCH FOR EQUITIES. I WAS TALKING ABOUT THE DOLLAR SPECIFICALLY SO WE HAVE A BIT OF THAT PAIN TRADE IN TERMS OF A STRONG DOLLAR ON THE BACK OF THESE RATE CUTS. I THINK FROM HERE THE BIG WORRY IS WE

GET INFLATIONARY RESURGENCE AND THAT IS SUPPLY DRIVEN RATHER THAN BEING DEMAND DRIVEN. THAT WOULD BE VERY BAD FOR EQUITIES AND FOR BONDS. SO THAT'S REALLY THE PAIN TRADE. IT'S THE BASE CASE AND SOMETHING TO WATCH GIVEN THE SHIPPING DISRUPTIONS AS WELL AS WHAT'S HAPPENING IN THE MIDDLE EAST. LISA: ONE THING I LOVE WAS HOW YOU DUG INTO THE RESULTS AND HOW STRONG THESE COMPANIES WERE. HOW MUCH IS THAT REALLY TIED TO THE COMMODITY CYCLE THAT WE'VE SEEN GOING THE OPPOSITE DIRECTION THAT SONY PEOPLE W

ERE EXPECTING. >> IT IS CERTAINLY PLAYING A ROLE, THE FACT WE HAD MARGINS BE VERY HEALTHY. WHAT WE'VE HAD WAS MARGIN CONTRACTIONS THROUGH MOST OF LAST YEAR BECAUSE YOU HAD REAL WAGE GAINS, CPI NOT BEING AS STRONG AS PREVIOUSLY AND CONSUMERS HAVE BEEN PUSHING BACK ON THE STRONGER PRICES WE'VE HAD. BUT ON THE POSITIVE SIDE IS THIS PPI DECLINE AND IT'S BEEN QUITE SIGNIFICANT. WE HAD AN UPSIDE SURPRISE IN THE MOST RECENT DATA BUT IT LOOKS MORE LIKE NORMALIZATION BACK TO AVERAGE LEVELS THAN IT LOOKS

LIKE SOMETHING WORRYING. IF WE GO OUT COMMODITY PRICES RISING AGAIN OR RESURGENCE THERE IT'S WORRYING FOR MARGINS. THE PRODUCTIVITY GAINS YOU ARE SEEING MEANS WE HAVE MARGIN EXPANSION OR THE VERY LEAST THESE HIGH LEVELS BUT WERE THE TOP OF THE PREVIOUS RANGE BEFORE COVID. JONATHAN: ONE COMPANY -- LISA: ONE COMPANY DOES NOT MAKE A TREND BUT I WONDER ABOUT THE SIGNALS YOU GET FROM MACY'S TALKING ABOUT PRETTY SIGNIFICANT DECLINES. IT BASICALLY HIGHLIGHTS THE DIFFICULTIES THAT CERTAIN LOWER INCOME C

ONSUMERS ARE HAVING CONTINUING TO MAINTAIN THEIR SPENDING. HOW DO YOU INTO AN OUTLOOK AT A TIME WHEN PEOPLE ARE LOOKING PAST THAT. >> I THINK IT IS SOMETHING TO CONSIDER BUT I THINK FROM THE HIGH-LEVEL EARNINGS WE ARE CONSIDERING, CONSUMPTION IS STILL STRONG. SOMETHING THAT'S ALSO BEEN TALKED ABOUT IS THIS ZERO INTEREST RATE LENDING THAT'S HAPPENED. THEY ARE GETTING THE ZERO INTEREST RATE LENDING. I THINK THAT'S ALSO PROPPING UP THE CONSUMER BUT YOU NEED TO LOOK AT THE AGGREGATE NUMBERS IN TERMS

OF WHERE IS THE LEVEL OF THAT WEALTH AND HOW IS THE ECONOMY DOING GENERALLY. WE HAVE FOUND OUT SIGNIFICANTLY WHICH IS WHAT YOU ARE POINTING TO BUT COMING DOWN FROM A HIGH LEVEL IN SAVINGS TO A STILL HIGH LEVEL IS STILL POSITIVE FOR OVERALL CONSUMPTION. IT IS CERTAINLY WORTH WATCHING THE LOWER END OF THE CONSUMPTION RANGE BECAUSE THAT IS THE MARGINAL CONSUMER. THAT'S THE MARGINAL DIFFERENCE THAT MAKES THE GROWTH RESULT. ANNMARIE: YOU MENTIONED DISRUPTIONS FROM THE RED SEA. THE BRITISH CHAMBER OF

COMMERCE HESITATING THEIR EXPORTS. WHAT IS IT MEAN FOR AMERICAN BUSINESSES AND MANUFACTURERS. >> WE THINK ABOUT IT FROM INFLATION PERSPECTIVE BECAUSE IT IS THE SHIPPING COST THE FEEDS INTO YOUR OVERALL NUMBER. U.S. GOODS ONLY A SMALL AMOUNT OF THAT COST AND ONLY A SMALL AMOUNT OF THOSE SHIPPING GOODS GOES INTO THE OVERALL INFLATION METRIC. IT'S ALSO A VERY DIFFERENT ENVIRONMENT FROM WHEN WE HAD SUPPLY DISRUPTIONS IN 20. WE DON'T HAVE THESE MASSIVE IMBALANCES IN SUPPLY AND DEMAND FOR GOODS. WE D

ON'T HAVE THIS BACKED UP SHORTAGE SO IT'S NOT AS WORRYING AS IT WAS BACK THEN AND IT IS A SMALLER PART OF INFLATION AS WELL. >> GOOD TO CATCH UP AS ALWAYS. COULD YOU IMAGINE IF WE DID HAVE THOSE DYNAMICS AND WE HAD THIS TENSION IN THE RED SEA AND THESE ISSUES IN THE PANAMA CANAL. >> IT'S THE REASON SO MANY PEOPLE OF BEEN SURPRISED TO TRYING THAT ON ENERGY. BECAUSE OF HOW DIFFERENT AND HOW QUICKLY IT HAS CHANGED. ANNMARIE: WITH THE RED SEA IT'S ALWAYS ABOUT THAT GOODS INFLATION. WE ARE TALKING AB

OUT WHAT'S GOING ON IN MACY'S AND WHAT DOES THIS MEAN FOR LOWER END CONSUMER. IF YOU HAVE MORE DISRUPTIONS EVEN IN ENERGY OR GOODS IT'S GOING TO HIT THE LOWER END CONSUMER. >> CAN WE TALK ABOUT CONSUMER CONFIDENCE AS WELL. UNEMPLOYMENT'S BEEN AT 4% FOR 24 MONTHS. UNEMPLOYMENT, A ROCK-BOTTOM. EQUITY MARKETS ALL-TIME HIGHS. FINANCIAL CONDITIONS BASED ON WHAT HAPPENED SEEMED TO BE WIDE OPEN TO ISSUE DEBT AT THE MOMENT. WE EXPECT CONSUMER CONFIDENCE TO KEEP REBOUNDING. LISA: IT IS THE CURRENT CONDIT

ION PEOPLE FEEL IS POSITIVE BUT THEIR EXPECTATIONS FOR THE FUTURE AND EVERYONE ELSE TENDS TO BE NEGATIVE. THAT'S WHAT WE ARE AT RIGHT NOW. PEOPLE HAVE SEEN THIS UPWARD TREND. IT'S HINGED TO THE NEW CYCLE. ANNMARIE: RETAIL SALES WERE SOFTER AND THEN WE HAD THAT SPIKE IN INFLATION BUT NO ONE WAS EXPECTING. WE HAD THREE MONTHS OF HIRE TREND, OF THE WHITE HOUSE LOVES WHEN THE COMFORTS -- CONFERENCE BOARD COMES OUT. IF THAT WAS STARTING TO SOUR THAT CAN UP AND SOME OF THEIR MESSAGE. JONATHAN: THEY LO

VE IT IF IT'S GOOD. IF IT'S NOT THEY PROBABLY WON'T BE TALKED ABOUT. WE WILL FIND OUT IF IT'S GOOD AT 10:00 EASTERN TIME. POSITIVE BY .1%. HERE'S YOUR BLOOMBERG BRIEF WITH DANI BURGER. DANI: THE GLOBAL ECONOMY HAS A GROWING CHANCE OF PULLING OFF A SOFT LANDING ACCORDING TO A DRAFT OF THE G20'S CLOSING STATEMENT AT THIS WEEK'S MEETING IN BRAZIL. THE TEXT IS NOT FINAL, THE DRAFT SAYS RISK TO THE GLOBAL ECONOMIC OUTLOOK, UPSIDE RISK INCLUDE FASTER THAN EXPECTED DISINFLATION. GLOBAL FINANCE MINISTER

S ARE EXPECTED TO ARRIVE IN MEETINGS TOMORROW. SHARES OF LOEWS OR FALLING DESPITE THE COMPANIES REPORTED FOURTH QUARTER COMPARABLE SALES THAT BEAT ANALYST ESTIMATES. IT WAS STILL A DECREASE WITH THE HOME-IMPROVEMENT RETAILER CITING A SLOWDOWN IN DIY DEMAND AND UNFAVORABLE JANUARY WEATHER. DESPITE THAT THE COMPANY CEO SAYS WE REMAIN CONFIDENT IN THE LONG-TERM STRENGTH IN THE MARKET. EXPEDIA CUTTING 9% OF ITS WORKFORCE AS THE COMPANY ATTEMPTS TO REVIVE GROWTH AND REGAIN MARKET SHARE. THE SEATTLE-B

ASED FIRM WILL CUT 1500 JOBS ACROSS THE GLOBE. EARLIER THIS MONTH EXPEDIA REPORTED DISAPPOINTING HOLIDAY RESULTS AND ISSUED A WEAKER THAN EXPECTED OUTLOOK FOR THE CURRENT QUARTER IT ALSO ANNOUNCED A LEADERSHIP SHAKEUP. THAT'S YOUR BLOOMBERG BRIEF. JONATHAN: HOPE INCREASING FOR A CEASE-FIRE IN GAZA. >> MY NATIONAL SECURITY SAYS WE ARE WE ARE NOT DONE YET. HOPEFULLY THE NEXT MONDAY WE WILL HAVE A CEASE-FIRE. >> LIVE FROM NEW YORK THIS IS BLOOMBERG. JONATHAN: STOCKS ARE POSITIVE BY .1% ON THE S&P 5

00 DRIFTING LOWER, A 10 YEAR YIELDS DOWN A BASIS POINT. LATER ON TODAY THIS AFTERNOON, $42 BILLION OF SEVEN-YEAR NOTES, TO MARKET. UNDER SURVEILLANCE THIS MORNING HOPE INCREASING FOR A CEASE-FIRE IN GAZA. >> I HOPE BY THE BEGINNING OF THE WEEKEND. MY NATIONAL SECURITY ADVISOR TELLS ME WE ARE CLOSE PRAYED WE ARE NOT DONE YET. MY HOPE IS BY NEXT MONDAY WE WILL HAVE A CEASE-FIRE. >> THE LATEST, THE PRESIDENT EXPRESSING OPTIMISM FOR TEMPORARY PAUSE IN FIGHTING IN GAZA. ISRAEL AND HAMAS YET TO COMMEN

T ON BIDEN'S REMARKS WITH ISRAELI OFFICIAL SAYING A GROUND OFFENSIVE IS COMING BRADEN AARON DAVID MILLER JOINS US NOW FOR MORE. CAN WE START WITH THE COMMENTS WE HEARD FROM PRESIDENT BIDEN -- FROM BENJAMIN NETANYAHU. SAYING HAMAS CONTINUES TO MAKE HE CALLS DELUSIONAL DEMANDS. WE KNOW WHAT THESE DEMANDS ARE? >> EARLIER IN THE NEGOTIATIONS THE REASON THEY STALLED IS HAMAS WAS ASKING FOR 1500 OR MORE PALESTINIAN PRISONERS, SOME CONVICTED OF SERIOUS SECURITY OFFENSES SPECIFICALLY KILLING ISRAELIS. O

NE OF THE REASONS WE ARE CLOSER TO A DEAL IS HAMAS SEEM TO OF WALKED BACK SOME OF THOSE DEMANDS. WE ARE NOT TALKING ABOUT AN INFLUENTIAL TRADE PRAYED 45 HOSTAGES OR SO FOR 45 DAYS OF QUIET. AND PROBABLY HUNDREDS OF PALESTINIAN PRISONERS. IN TERMS OF THE HARD-CORE PRISONERS PROBABLY MANY FEWER THAN >> HAMAS WANTED. >>BIDEN IS TALKING ABOUT THIS COULD HAPPEN AS SOON AS MONDAY AND THEN ON MARCH 10 IT'S THE START OF RAMADAN. DOES ADIL HAVE TO GET DONE BETWEEN MONDAY AND SUNDAY FOR THIS TO BE SUCCESS

FUL? >> I WAS SURPRISED THE PRESIDENT PUT A DAY ON THESE THINGS. ONE OF THE WORST OFFENSES YOU CAN COMMIT TO NEGOTIATION TO SIGNAL YOU'RE IN A HURRY. BUT I THINK HERE YOU HAVE A SITUATION WHERE THERE'S REAL URGENCY ON THE PART OF HAMAS AND PERHAPS THE GOVERNMENT OF ISRAEL TO TAKE ADVANTAGE OF THE FACT MILITARY PRESSURE, HAMAS'S DECISION, PAYING ATTENTION TO THE CONSTITUENCIES IN GAZA. THEY WREAKED HAVOC ON THEM AS A CONSEQUENCE OF THE TERROR SURGE ON OCTOBER 7. A RAMADAN PAUSE WOULD PLAY IN THEI

R ADVANTAGE. THE ISRAELIS MIGHT BE GETTING CLOSER TO IDENTIFYING WHERE THE OTHER THREE ARCHITECTS AND IMPLEMENTERS OF THIS OCTOBER SEVENTH TERRORIST ARE PRETTY AND THAT POSES A FASCINATING, WHAT IF THE ISRAELIS ACTIVELY IDENTIFIED WHERE HE WAS IN THE NEXT FEW DAYS. WITH A STRIKE TO KILL HIM. WHICH COULD JEOPARDIZE THE LOOMING AND PENDING HOSTAGE EXCHANGE. I THINK THE ANSWERS THEY PROBABLY WOULD. >> I WANT TO PICK UP ON YOUR FIRST POINT THAT THE DASHERS PRIZE THE PRESIDENT IS PUTTING A SPECIFIC D

AY ON THIS ARE THE FACT THAT A LARGE NUMBER OF ARAB AMERICANS AND WISHING TO AND TODAY WILL VOTE UNCOMMITTED ON THEIR PRIMARY BALLOT. >> DOMESTIC WORK FOR REPUBLICAN AND DEMOCRAT SECRETARY OF STATE AND PRESIDENTS. POLITICS HOVERS OVER ALL OF IT. I'M NOT SURE HOSTAGE EXCHANGE IS CAN FUNDAMENTALLY ALTER THE POSITION OF THOSE MICHIGAN VOTERS WHO HOLD THE PRESIDENT RESPONSIBLE FOR HIS PRETERNATURAL SUPPORT OF ISRAEL ENDING ISRAEL'S EFFORTS TO IDENTIFY AND CRUSH HAMAS IS MILITANT ORGANIZATION. I'M NO

T SURE THIS PARTICULAR DEAL IS GOING TO CHANGE THEIR MIND. WHAT MIGHT BE INVOLVED IF YOU CHANGE THE PICTURES IN GAZA AND MAY THIS DEAL WILL ALLOW 45 DAYS OR SO TO DO THAT BUT WE ARE BY NO MEANS AT THE END OF THIS WAR. LISA: YOU TALKED ABOUT PRESSURE ON HAMAS BUILDING. PRESSURE FROM WHO? >> THE IDF. THEY BEEN OPERATING THERE FOR WEEKS AND I THINK THEY HAVE MADE SIGNIFICANT PROGRESS IN TERMS OF ELIMINATING THE MAJORITY OF HAMAS BATTALIONS. THE SENIOR LEADERSHIP, THOSE WHO ACTUALLY PLANNED OCTOBER

7, THAT'S WHAT THE ISRAELIS WANT TO GET. WHETHER OR NOT THIS DEAL GOES THROUGH AND EVEN IF IT DOES THE ISRAEL EASE ARE GOING TO BE IN GAZA FOR AS LONG AS IT TAKES. FOR MR. NETANYAHU FRANKLY THAT WOULD BE THE MOST VISIBLE MATERIAL GAIN OF A FIVE-MONTH WAR SO FAR AND FOR POLITICAL AND LEGAL REASONS IN ORDER TO STAY IN POWER. BENJAMIN NETANYAHU NEED SOME SORT OF VICTORY IN THIS WAR. >> THE REASON I ASK IS WE ARE HEARING A LOT AND THERE ARE QUESTIONS ABOUT THE APPETITE TO CONTINUE THIS ESPECIALLY GI

VEN SOME OF THE RATCHETING UP IN TENSIONS. I'M INTERESTED IN WHAT'S GOING ON WITH SAUDI ARABIA AND WHAT'S GOING ON WITH RESPECT TO HEZBOLLAH AND THE SIMMERING TENSIONS AT THE NORTHERN BORDER. IS THERE A SENSE IRAN IS ALSO PRESSURING HAMAS TO COME SWORD -- COME TO SOME SORT OF DEAL TO DE-ESCALATE WAS GOING ON IN THE MIDDLE EAST. >> I'M NOT SURE FRANKLY RIGHT NOW IRAN ACCORDING TO THE BEST INTELLIGENCE ESTIMATES SURPRISED BY THE OCTOBER 7 ATTACK. I'M NOT SURE THE IRANIANS ARE THE KEY DRIVERS IN TH

E CALCULATIONS. I THINK POLITICAL AND FISCAL SURVIVAL. I THINK SIN WAR BELIEVES HE WILL SURVIVE THIS AND HAMAS WILL CONTINUE TO EXERCISE A FAIR AMOUNT OF INFLUENCE PERHAPS EVEN CONTROL IN GAZA IN THE MONTHS AND YEARS TO COME. THAT'S WHAT DRIVING -- WHAT IS DRIVING THIS. >> FASCINATING. ALWAYS APPRECIATE YOUR OPINION. THANK YOU FOR THIS. LET'S -- THAT IS ONE WAR PRAYED HERE IS ANOTHER. SOME COMMENTS FROM JANET YELLEN MEETING WITH THE PRINE -- FINANCE MINISTERS. THE G7 NATIONS AND AUSTRALIA FROZE

RUSSIAN ASSETS. MUCH OF THAT IN THE EU MORE THAN TWO THIRDS OF THAT. THIS IS WHAT SECRETARY YELLEN IS SAYING WITH PREPARED REMARKS. I BELIEVE THERE'S A STRONG INTERNATIONAL LAW, ECONOMIC AND MORAL CASE FOR MOVING FORWARD AND USING THIS PHRASE UNLOCKING THE VALUE OF THOSE ASSETS TO BOLSTER UKRAINE'S DEFENSE AGAINST RUSSIA. ANNMARIE: THERE'S BEEN A LOT OF DEBATE ABOUT WHICH PRECEDENT THIS WOULD SET AND WHAT HAPPENS IN TERMS OF THEIR VALUE DO YOU GIVE THAT VALUE TO UKRAINE. THERE WAS SOME TALK OF T

HE INTEREST THAT SOME OF THESE ASSETS ARE ACCRUING. TWO THINGS. THIS IS GOING TO BE A HUGE CLOUD OVER THIS G20 BECAUSE YOU HAVE COUNTRIES WHO DO NOT AGREE WITH THIS STATEMENT. AND THERE'S BEEN A LOT OF DIVERGENCE BETWEEN THE GLOBAL SOUTH AND THE WEST. KICK THIS DOWN THE ROAD. THIS COULD BE NOTHING THAT HAPPENS IN TERMS OF OUR REPORTING UNTIL THE G7 MEETS. THE UNITED STATES WILL WANT TO ACT WITH EUROPE WHEN IT COMES TO THESE ASSETS. IT WILL BE HIGHLY CONTROVERSIAL. LISA: UNLOCK THE VALUE, WHAT DO

ES THAT MEAN? IT MEANS TAKE THE MONEY. YOU HAVE ASSETS FROZEN AND NOW YOU TAKE THOSE ASSETS. AND YOU USE THEM TO GIVE THEM TO UKRAINE. SOME PEOPLE SAY THIS IS A GREAT WAY TO PAY FOR THE OFFENSIVE BY UKRAINE BUT TO ANNMARIE'S POINT IT RAISES QUESTIONS, WHAT KIND OF RISK IF PEOPLE ARE TRYING TO DECIDE WHETHER THEY PUT THE MONEY WITH YOU AND YOU'LL BE A CUSTODIAN WHAT KIND OF REPUTATIONAL RISK WILL THAT CREATE PRAYED -- CREATE. ANNMARIE: THE WEAPONIZATION OF THE U.S. DOLLAR. WE SPOKE TO THEM LAST W

EEK AND HE BASICALLY SAID TBD BUT LEANING IN ON THEY WOULD LIKE TO SEE SOMETHING HAPPEN. I THINK JANET YELLEN USING THE WORD MORAL IS INTERESTING. JONATHAN: THIS MONEY, THESE ASSETS ARE EUROPEAN NATIONS AND FRANCE AS WELL. THEY ARE NOT IN DIRECT CONFLICT WITH RUSSIA RIGHT NOW. THAT'S WHY LEGALLY THIS GETS INTERESTING. CERTAINLY IT'S WHY IT'S MAKING. THERE'S A QUOTE IN THE STATEMENT IS THIS REALLY ABOUT UNLOCKING VALUE OR NEGOTIATION TACTIC. THIS WOULD BE A DECISIVE RESPOND TO RUSSIA'S THREAT TO

GLOBAL STABILITY. AND WOULD INCENTIVIZE IT TO COME TO THE TABLE TO NEGOTIATE A JUST PEACE WITH UKRAINE. THE LATEST FROM THE SEC. THIS MORNING IN BRAZIL. COMING UP, MACY'S REPORTING AN ESTIMATED FOURTH-QUARTER RESULTS BUT ANNOUNCING PLANS TO CLOSE ON 150 STORES. JONATHAN: EQUITIES DOING OK, POSITIVE BY 1%. HE IS A SNAPSHOT ON THE NASDAQ, POSITIVE. UP BY ABOUT POINT CHRIS -- UP BY ABOUT .6%. THROUGH THE FRONT AND, -- FROM THE FRONT END, YIELDS ARE A LITTLE BIT LOWER. 468.50 -- 4.6850. LISA: THERE

IS A CONCERN ABOUT THE DEBT AND THE GOVERNMENT SHUTDOWN, TECHNICALLY, THERE SHOULD BE. IT NEVER SEEMS TO SHOW UP. >> THERE IS A DEBATE RIGHT NOW. WHAT REASON IS THERE FOR SELLOFF? THIS IS WHAT WE HEARD FROM GOLDMAN. TWO VERY DIFFERENT VIEWS THERE. >> -- LISA: RIGHT NOW YOU ARE SEEING PRETTY GREAT GROWTH AND INFLATION SURPRISED TO THE UPSIDE. IF YOU PUT THAT TOGETHER, IT RAISES THE QUESTION OF HOW HIGH RATES CAN GO AND WHAT THE BASE INFLATION WILL BE. JONATHAN: I WILL NOT BORE YOU WITH THE EURO A

ND I WILL EXCITE YOU WITH THE YEN. WE HAVE A MOVE AT .3%. INFLATION COMES IN AND PEOPLE ARE ASKING THE QUESTION, IS IT TIME TO GO AT THE BOJ? LISA: ARE THEY GOING TO HAVE A POSITIVE RATE? UP CONSIDERABLY BECAUSE INFLATION IS COMING IN AT 2%. JONATHAN: IT HAS BEEN A LONG TIME. WE HAVE SOME NUMBERS FOR YOU LITTLE BIT LATER. HOW QUICKLY WE CAN GET BACK TO 100. HERE ARE YOUR TOPSOIL. PRESIDENT BIDEN EATING CONGRESSIONAL LEADERS IN THIS RUNNING, LOOKING TO STRIKE A DEAL TO AVOID GOVERNMENT SHUTDOWN.

SPEAKER MIKE JOHNSON AND MINORITIES EITHER MITCH MCCONNELL AMONG THOSE IN ATTENDANCE WITH A DEADLINE FOR GOVERNMENT AGENT IS COMING AS SOON AS SATURDAY. FACING A MARCH 8 DEADLINE. ANN-MARIE, CAN WE AVOID A SHUTDOWN? ANN-MARIE: MARCH 1 IS IMPORTANT. BUT THE BIG ONE WOULD BE MARCH 8. I WOULD ARGUE, IGNORE THESE DATES AND LOOK AT APRIL 30. REGARDLESS WHAT HAPPENS, THERE WILL BE A 1% CUT BASED OFF THE MCCARTHY AND BIDEN FEEL. THE QUESTION OF IF HE KEEPS THE GAVEL, WILL THEY SHOW MORE GRACE TO HIM? I

T IS A GREAT QUESTION. ONCE HE DOES A DEAL WITH HER CATS THAT QUESTION WILL BECOME FRONT AND CENTER. JONATHAN: WE WANT TO DO A CHECK OF SHARES OF ALPHABET REBOUNDING AFTER FALLING YESTERDAY BY MORE THAN 4%. THE RISK TO AI POWERED COMPETITION. CONCERNS GOING AFTER GOOGLE CAUSED ITS AI FEATURE AFTER DRYING CRITICISM OVER INACCURATE HISTORICAL DEPICTIONS OF RACE. ULTIMATELY, HAVING PUT IDEOLOGY BEFORE FACTS? IF THEY HAVE, HOW MUCH CONFIDENCE WILL BE LOST IN THIS BUSINESS? LISA: IT RAISES A BIGGER Q

UESTION. WHAT KIND OF BIASES ARE GETTING BAKED INTO THE MODELS THAT WE HAVE NOT HAD TIME TO IDENTIFY? ESPECIALLY GIVEN THE COURT CASE OF THE COURT THAT THEY ARE DEALING WITH WITH MODERATION OF SOME OF THESE PLATFORMS. THIS IS A HUGE ISSUE. JONATHAN: WHO CAN WE TRUST TO REGULATE IT? LISA: YOU RAISE A GREAT POINT AND THIS IS ONE OF THE REASONS WHY THEY WOULD ARGUE THAT IT IS MESSY. BUT AT LEAST IT FOSTERS INNOVATION FOR PEOPLE TO TRY THINGS. THE REAL CHECK MIGHT BE THE CONSUMER. AMBURGEY: WHY WOUL

D THEY RELEASE THIS IF IT WAS NOT READY FOR PRIME TIME? SOME OF THE IMAGES ARE INACCURATE OR EVEN OFFENSIVE. WHY WOULD YOU PUT OUT ANYTHING THAT IS INACCURATE OR OFFENSIVE? JONATHAN: IN HOUSE, THEY TESTED IT AND THIS WAS THE DESIRED OUTCOME. THAT WOULD BE VERY CONCERNING. SIBLINGS TO BLOCK KROGER'S ACQUISITION OF ALBERTSON'S, ARGUING A MERGER WOULD LEAD TO LOWER WAGES AND HIGHER FOOD PRICES. THE BIGGEST GROCERY DEAL EVER, LEADING THEM TO COMPETE WITH AMAZON AND WALMART. THEY MAKE A GOOD ARGUMENT

, BUT I'M NOT SURE WHAT THAT IS WORTH ON THIS FRONT. LISA: THERE IS A LOT -- THERE ARE A LOT OF QUESTIONS. THERE ARE DIFFERENT THRESHOLDS THAT THEY HAD. JONATHAN: AT 10:00 A.M. EASTERN TIME, MACY'S REPORTS EARNINGS THAT BEAT ESTIMATES. THE COMPANY ALSO ANNOUNCING PLANS TO CLOSE 100 50 UNDERPERFORMING LOCATIONS AND AN EFFORT TO WARD OFF CERTAIN INVESTORS. A YEAR OF TRANSITION AND INVESTMENT. JOINING US NOW TO DISCUSS THE SECTOR AND BUSINESS. THANK YOU FOR BEING WITH US. TRADITIONALLY WE TALK ABOU

T MACY'S AND BLOOMINGDALE'S BEING THAT ANCHOR RETAILER. HOW HAS THAT CHANGED AND HOW HAVE THINGS DEVELOPED FOR YOU? >> THEY ARE CONSIDERABLY SMALLER THAN THE REGIONAL MALLS, SO FOR US, ANCHOR RETAILER IS ARE IN THE 35,000 SQUARE FOOT RANGE. FAR LESS RELYING ON ANY ONE TENANT, BUT THEY ARE STILL GREAT DRAWS. THEY STILL HAVE AN OUTLET BUSINESS. BOTH OF WHICH THEY FACILITATE BRANDS THAT WOULD NOT GET CERTAIN LIFESTYLE STORIES. JONATHAN: EIGHT USUALLY GOES SOMETHING LIKE THIS. IT IS NOT FOR YOU, IS

IT? >> EVER SINCE COVID, THE OPEN AIR SHOPPING CENTER HAS BEEN THE HIGHLIGHT IN OUR SECTOR. PEOPLE LIKE A PLACE WHERE THEY CAN GATHER. OUTLET CENTERS OF 10 TO 15 YEARS AGO ARE EVOLVING. WE ARE CHANGING THE USES AND FILLING SOME OF THAT BACON FROM COVID WITH DIFFERENT USES, NOT NECESSARILY OUTLET USES. JOHN RETAILERS WERE PEOPLE WANT TO COME AND SHOP EVERY WEEK AS OPPOSED TO ONCE A QUARTER. THE CYCLE AND HOW MUCH ARE YOU SEEING THAT BIFURCATION WITH RESPECT TO SOME OF THE LOWER INCOME SHOPPERS OR

PEOPLE LOOKING FOR DISCOUNTS AND THOSE WILLING TO GO TO THE UPPER END TYPE OF PRODUCTS? ? SEE MACY'S AS A COMPETITOR FOR US. FOR US, IF WE CAN CREATE MORE THEATER AND EXCITEMENT, IF WE CAN CREATE MORE OF AN ENTERTAINING ENVIRONMENT FOR PEOPLE TO SHOP , YOU CAN SHOP THE ENTIRE LIFESTYLE. THE BRAND AND THE DEPTH OF THE PRODUCT IN ONE ENVIRONMENT WEATHER SERVICE -- THAT IS A HUGE PART OF THE BUSINESS AS WELL. EVERYWHERE ONE CAN SHOP, THERE IS NOTHING MORE SATISFYING TO A CUSTOMER. IT HELPS TO CLOS

E THE DEAL SOMETIMES. WE WANT TO MAKE SURE THAT WE PROVIDE SERVICE WHERE A LOT OF OTHER VENUES DO NOT. LISA: I NEED SOMEONE TO TELL ME THAT I LOOK GOOD BEFORE I BUY SOMETHING. THERE ARE SO MANY BROADER ECONOMIC QUESTIONS TIED TO YOUR BUSINESS TO UNDERSTAND HOW MANY PEOPLE ARE WILLING TO SHELL OUT $200 A DAY FOR THE EXPERIENCE OF WALKING UP AND DOWN THE MALL AND BUYING SOME FOOD IN THE PROCESS. ARE YOU SEEING GREATER FOOT TRAFFIC INCREASING OR A PUSHBACK WITH RESTRAINT BY CONSUMERS WHO HAVE GOTTE

N STRETCHED? >> OUR TRAFFIC NUMBERS SEEM PRETTY CONSISTENT. A LOT OF THAT IS BECAUSE WE ARE CLOSER INTO WHERE THE PUBLIC IS SHOPPING NOW. THE OLD NARRATIVE, WE WERE SO FAR OUT THAT IT REQUIRED A SPECIAL TRIP AND A SPECIAL DRIVE. NOW PEOPLE ARE MOVING TO A LOT OF GEOGRAPHIES WHERE OUR CENTERS ARE ANY BECOME THE CENTER OF THE ENERGY. IN ORDER FOR US TO COMPETE IN THOSE MARKETPLACES, WE NEED MORE VARIETY. IT COMES WITH OUTLET RETAILERS AND BETTER FOOD AND BEVERAGE, RESTAURANTS, SIT-DOWN, ENTERTAINM

ENT, THINGS FOR PEOPLE TO DO. LISA: WHEN I GREW UP, GOING TO TANGER WAS A HIGHLIGHT. HOW DO YOU SEE RETURNING CUSTOMERS SO THAT IT IS NOT JUST, I'M GOING TO GO TO THE OUTLET ONCE A YEAR. >> LET'S TAKE DEER PARK AS AN EXAMPLE. TAKE A LOOK AT A CENTER LIKE THAT. IT IS UP TO US TO MAKE SURE THAT CONTINUE TO DRIVE. THE BRANDS THAT PEOPLE LIKE. IT IS A LOT OF COMPETITION TO GET PEOPLE OFF THE COUCH AND INTO A SHOPPING CENTER. YOU HAVE TO HAVE THE BRANDS THAT THEY LIKE. A LOT OF THESE BRANDS THAT YOU

ONLY SAW ONLINE, BUT NOW YOU ARE SEEING THESE BRANDS AND BRICKS AND MORTAR FORMAT. EMORY: IS THAT IT IS LESS EXPENSIVE THAN A MALL. WHY IS THAT? >> IS A CONSIDERABLE CHARGE. IN OUR CENTERS, WHEN YOUR OPEN AIR, THERE IS FAR LESS ABOUT IT RENTS TO DIVIDE AMONGST RETAILERS. WE ARE PRIMARILY SOUTHERN BASED. A HUGE PART OF THE NARRATIVE. WE JUST BOUGHT A SHOPPING CENTER IN ALABAMA. IT SNOWED IN ALABAMA. THERE IS A PIECE OF THAT THAT WE AT LEAST SEE SOME SAVINGS ON. JONATHAN: CAN WE TALK ABOUT CRIME I

N RETAIL? IT WAS REALLY BAD. WHAT IS THE REALITY IN YOUR BUSINESS AND IS IT REGIONAL OR STATE-BY-STATE? >> I THINK IT IS STATE-BY-STATE. IT IS SOMETHING THAT WE ARE ABSOLUTELY -- WHEN WE DIED IN, TECHNOLOGY HAS PLAYED A GREAT ROLE IN HELPING US THINK THROUGH THAT. HOW DO YOU FIGHT OFF ORGANIZED CRIME? WE HAD GREAT ACTIVITY. ALERTS WHEN THERE ARE THINGS THAT ARE PLANNED AND WE HAVE GREAT SURVEILLANCE ON SITE, DIGITAL SURVEILLANCE AND DRONE SURVEILLANCE SO THAT IF AN INCIDENT DOES OCCUR. JONATHAN:

HAS THIS BEEN PASSED TO YOU? >> WE ARE PARTNERS WITH A LOT OF THE RETAILERS IN OUR CENTERS. WE TALKED ABOUT THE COST. WHEN SOMETHING HAPPENS AT A CENTER, IT IS TAGGER ON THAT. WE SAY WE PROVIDE A FUN, ENTERTAINING AND SAFE ENVIRONMENT FOR OUR SHOPPERS TO COME EVERY DAY AND WE WOULD LIKE TO BE ABLE -- THAT SHOULD BE OUR HALLMARK. JONATHAN: YOU CAN CATCH UP WITH DANNY. >> PRESIDENT BIDEN: HE CANNOT EVEN REMEMBER HIS WIFE'S NAME. NUMBER TWO, IT IS ABOUT HOW YOU -- HOW OLD YOUR IDEAS ARE. >> BIDEN

IS STRUGGLING TO RELIEVE AMERICA'S FEARS THAT HE IS TOO OLD FOR -- TO RUN FOR ANOTHER TERM. MANY DEMOCRATS HAVE CONCERNS ABOUT BIDEN'S AGE AND LESSON HAVE -- HALF HAVE THE SAME CONCERNS ABOUT TRUMP. BELIEVING THAT THE SEC IS UNLIKELY TO APPROVE A PUBLIC OFFERING BECAUSE OF OPERATIONS IN CHINA. THEY COULD ALSO CONSIDER HONG KONG OR SINGAPORE. FILING FOR AN IPO WITH A VALUATION BETWEEN 80 BILLION AND $90 BILLION. A PRICE SHOCK. DECLINING PRODUCTION IN AFRICA HAS CONTRIBUTED TO THE PRICE JUMPING MO

RE THAN 50% THIS YEAR. THE NEW REGULATION WILL REQUIRE THAT CHOCOLATE MAKER IS -- A COSTLY EXERCISE THAT THREATENS TO DRIVE PRICES EVEN HIGHER. DONOVAN: THEY ARE COMING AFTER YOUR CHOCOLATE NOW. LISA, I AM JOKING. MORE FED SPEAK. >> THE MARKET IS NOT GOING TO CHALLENGE THE FED LIKE THEY DID LAST YEAR IN AUGUST AND SEPTEMBER OF LAST YEAR. THIS IS A VERY DIFFERENT TIMEFRAME. JONATHAN: THIS IS BLOOMBERG. LISA: ABSOLUTELY NOT. ♪ JONATHAN: SESSION HIGHS AT 20%. ON YIELDS, DOWN A BASIS POINT ON THE 10

YEAR. UNDER SURVEILLANCE THIS MORNING. MARKETS DIGESTING MORE FED SPEAK. >> THE MARKET IS NOT GOING TO CHALLENGE THE FED LIKE IT DID LAST YEAR IN AUGUST, SEPTEMBER OF LAST YEAR. WE SAW THE SELLOFF. THIS IS A VERY DIFFERENT TIMEFRAME. THE FED IS TELLING US THAT THEY BOTH CUT RATES THREE TIMES AND THEY ARE NOT WILLING TO CHALLENGE. JONATHAN: URGING PATIENTS. HE SANG WITH INFLATION RUNNING ABOVE TARGET, DEMAND SHOWING CONSIDERABLE MOMENTUM, MY OWN VIEW IS THAT THERE IS NO NEED TO PREEMPTIVELY ADJU

ST. NOT MUCH HAS CHANGED IN THE FED OUTLOOK OVER THE LAST FEW WEEKS, SO IT IS TIME TO EXERCISE SOME PATIENTS. THREE CUTS IN 2024. JOINING US RIGHT NOW, IT IS AMAZING. JANUARY, FEBRUARY, MULTIYEAR, IT IS HAPPENING AS WE PRICE OUT CUTS. THIS IS PROBABLY A LESSON FOR PEOPLE. DO NOT ASK ME. DID YOU ANTICIPATE THIS? >> THE FED PRICING, YES, THE SUPPLY AND NARROWING OF SPREADS, CERTAINLY NOT. INVESTMENT-GRADE SPREADS ARE IN THE BOTTOM SEVENTH PERCENTILE OF HISTORY BUT THEY GO THROUGH THESE REGIMES OF

REALLY TIGHT SPREADS. A GREAT EXAMPLE AS THE LATE 1990'S. BUT SPREADS WERE BELOW AVERAGE FOR SOMETHING LIKE THREE YEARS. I AM NOT CONFIDENT THAT WE ARE GOING TO HEAD THAT WAY THIS TIME AROUND, BUT THERE IS EVIDENCE. LISA: IS THERE A BENCHMARK THAT WOULD CRACK SOME OF THE DEMAND FOR SOMETHING THAT SEEMS UNCOLLECTIBLE RIGHT NOW? I THINK THERE IS A LOT OF TENSION. BASED -- THEY TEND TO BE SLOW MOVING ENTITIES. WHAT WE HAVE SEEN IS THAT FOR MUCH OF THE LAST DECADE AND A HALF, THEY HAVE BEEN MORE HEA

VILY OVERWEIGHT RISK ASSETS. NOW THAT CASH INFLOWS ARE SUFFICIENT ENOUGH TO DRIVE THEIR OWN RETURNS, THEY ARE ALLOCATING INCREASINGLY TO THE CREDIT SIDE OF THINGS. IT IS DRIVING AND UNAPPRECIATED AMOUNT OF DEMAND. LISA: IT RAISES THE QUESTION OF WHAT -- THERE WAS A HOST OF REASONS IN THE HOUSING MARKET THAT PEOPLE BELIEVE THAT THE FED FACES THAT LAST PROBLEM COME A RELATIVELY PAINLESS DISINFLATION IS LIKELY TO BECOME A MORE NUANCED PROCESS. THE DATE RISK IS A DELAY TO THE START OF CUT OR EVEN A

SLOWER PROCESS. WHAT IS THE CONSEQUENCE OF THAT? IS IT FULLY PRICED IN A MARKET THAT HAS GOTTEN ON THE WORD? >> WHEN I VIEW IT FROM MACRO ECONOMIC PERSPECTIVE, IT HAS BEEN ABSENT FOR A NUMBER OF YEARS SINCE. THE DIRECTION IN INTEREST RATES IS NOT SLOWING RAPIDLY. EACH OF THOSE CUTS HAS BEEN ABOUT 75 BASIS POINTS. LAST WEEK, THEY HIGHLIGHTED SEVERAL. BUT I THINK IT IS INDICATIVE WHAT THE MARKETS ARE PRICING RIGHT NOW. THE PERIOD OF ECONOMIC GROWTH THAT SUSTAINS LONGER THAN WHAT WE THOUGHT. JONATH

AN: GOOD TO GET YOUR VIEW ON THINGS. JUST THINK ABOUT IT. RATES HAVE GONE ABOVE WHAT PEOPLE THOUGHT THEY WOULD BE. THEY HAVE STAYED THERE LONGER THAN PEOPLE THOUGHT AND UNEMPLOYMENT SAT AT 4%. WE ARE TALKING ABOUT RECORD DEBT ISSUANCE. LISA: DOES THIS MEAN THAT THE LAGS WERE NOT IN EXISTENCE OR THEY ARE SUPERLONG? THIS IS THE QUESTION. THEY ARE NOT GOING TO BE AFFECTED BY SOME OF THE RATE HIKES OR IS IT SOMETHING THAT IS A MORE SUSTAINABLE STRENGTH? JONATHAN: STEPHEN IS WITH US. GREAT CATCH UP W

ITH YOU. CAN YOU WALK US THROUGH HOW THIS HAS SHAPED YOUR BUSINESS IN ANY WAY, SHAPE OR FORM? >> IT IS LIKE THE CONSUMER, WE WERE TALKING ABOUT TRADING DOWN THE CONSUMER, RATHER THAN SPENDING THEIR DOLLARS ON LUXURY PRODUCTS, LOOKING FOR VALUE. THERE HAVE BEEN ARTICLES WRITTEN ABOUT THE HIGHEST END CONSUMER, SHOPPING IN STORES WHERE THEY WERE ABLE TO GET THE SAME PRODUCTS. THAT IS WHAT WE DO EVERY DAY. WE ARE SEEING A LOT OF CUSTOMERS WE HAD NOT SEEN BEFORE INVESTIGATING AND LOOKING AT OUR PRODU

CT. I THINK WE WILL -- LISA: YOU WHO -- YOU MANAGE A HOST OF PROPERTIES AND I WONDER IF IT IS TIME TO BE BUYING. THERE MIGHT BE A LIMITED SLEW OF BUYERS. OR IS THIS A PLACE WHERE YOU MANAGE A LITTLE MORE CAREFULLY? >> LAST QUARTER, WE BROUGHT TO MARKET. WE OPENED IN OCTOBER AND WE PURCHASED TW -- TWO PROPERTIES AND HUNTSVILLE, ALABAMA WAS AN OUTLET. IT IS OUR FIRST PORTFOLIO THAT IS NOT OUTLET OR PRICE FOCUSED. WE THINK THAT MAKES SENSE BECAUSE OF THE TEAM FOCUSING ON THESE OPERATIONS AND MARKET

ING. A KENEXA OUTLETS SPECIFICALLY. LISA: DO YOU THINK IT IS A GOOD TIME TO EXPAND BUYING PROPERTIES DUE TO WHERE RATES ARE? >> WE HAVE GREAT ACCESS TO CAPITAL AND UNTAPPED LINES OF CREDIT. OUR BALANCE SHEET IS VERY SOLID AND WE ARE DEFINITELY IN GROWTH AND ACQUISITION MODE. WE LIKE THE SOUTH. WE HAVE BEEN VERY SUCCESSFUL IN THE SOUTH. OPEN AIR SHOPPING CENTERS, HOURS OF OPERATION. IT WORKS FOR US, FOR SURE. WE ARE A SOUTHERN BASED COMPANY. WE HAVE GROWN UP IN THAT MARKETPLACE, SO WE KNOW IT PRE

TTY WELL. OUR LAST ACQUISITIONS, WE ACQUIRED IN NORTH CAROLINA AND ALABAMA. JONATHAN: IT IS EASY TO DO BUSINESS IN CERTAIN STATES THAN OTHERS. >> DEFINITELY. WHEN WE BUILD A NEW SHOPPING, IT IS REALLY THAT COMMUNITY. IT IS -- WHEN THEY ARE PRO-BUSINESS, IT WORKS OUT GREAT. WHERE DO THEY COME FROM? THEY COME FROM THAT LOCAL COMMUNITY. FROM A JOB NETWORK AND JOB CREATION POINT OF VIEW. BUT ALSO A TAX GENERATOR. JONATHAN: I THOUGHT PEOPLE WENT TO FLORIDA BECAUSE THE WEATHER WAS NICE. I DID NOT KNOW

IT WAS ABOUT THE TAXES. IT IS ABOUT THE WEATHER, OF COURSE IT IS. LISA: CAN YOU CAN -- CAN YOU IMAGINE IT RAINING TO EVENTUALLY? JONATHAN: THIS IS BAD HUMOR TODAY. REALLY BAD. DANA PETERSON AT THE BOARD. GOOD MORNING. EQUITIES ARE POSITIVE. UP BY .2%. >> MACROECONOMIC DATA IS NOT BEING CONSIDERED AS SERIOUSLY AS THE LACK OF NVIDIA RESULTS. >> WE REALLY HAVE NOT BROKEN ENOUGH YET TO DO THE DAMAGE. >> THE HIGHER THE ODDS THAT WE SEE A SLOWDOWN IN GROWTH. >> THEY ARE IN NO HURRY. >> THIS IS BLOOMB

ERG SURVEILLANCE. JONATHAN: LIVE FROM NEW YORK CITY, GOOD MORNING. THIS IS BLOOMBERG SURVEILLANCE. I AM JONATHAN FERRO. EQUITY FUTURES NEW SESSION HIGHS CLOSE TO 2% HIGHER ON S&P 500. 30 MINUTES AWAY FROM DATA IN AMERICA. LISA: BASICALLY HOW MUCH OUR COMPANIES ORDERING? A GOOD PORTION OF THOSE GOODS, PEOPLE FIND OUT ABOUT THAT, BUT HOW MUCH CONFIDENCE TO COMPANIES HAVE TO KEEP SPENDING WHERE WE ARE SEEING SOMEWHAT OF A RECESSION. JONATHAN: IT COMES -- WITH A CARES A LOT ABOUT CREDIT, OFF THE BAC

K OF THAT, LOOK AT THE DATA ITSELF. FOR TWO YEARS, IT HAS PLAYED THIS ADMINISTRATION. WHY ISN'T THAT TRANSLATING THE HIGHER CONSUMER CONFIDENCE? ANNE-MARIE: THEY WANT TO TALK ABOUT THE MICHIGAN SURVEY AND THE PRIOR THREE MONTHS WE HAVE GOTTEN FROM THE BOARD AND HOW AMERICANS ARE FEELING ABOUT THEIR ECONOMIC CONDITIONS. THEIR OUTLOOK FOR THE NEXT SIX MONTHS. SOME OF THAT DATA WITH HIGHER INFLATION, IS THAT GOING TO IMPACT WHAT WE SEE FROM THE SURVEY? AND THEN HOW DO THEY TURN THAT MESSAGE AROUND?

LISA: WEDGED IN BETWEEN, HOW MUCH OF THAT IS PART OF THE STORY. YOU CAN TRYING TO BUY SOMETHING. LISA: SERIOUSLY, THAT DOES FEATURE INTO YOUR SENSE OF CONFIDENCE AND STABILITY. JONATHAN: LET ME TELL YOU ABOUT JANET YELLEN. SHE MADE SOME COMMENTS AT A PRESS CONFERENCE. FINANCE MINISTERS, THE OUTLOOK FOR THE ECONOMY QUITE FAVORABLE ON INFLATION. IT WILL MOVE CLOSER TO 2% AS THE YEAR GOES ON. LISA: THIS WAS CONSENSUS THAT PEOPLE SEEM TO BE QUESTIONING THAT. AROUND 3%. CAN THE FED STILL CUT RATES?

CAN YOU GET THE SENSE THAT RATES ARE GOING MUCH LOWER, OR IS IT IS THIS A NEW PARADIGM? JONATHAN: DO YOU WANT TO RUB IT IN ABOUT YOUR MORTGAGE AGAIN? LISA: IT IS -- IT HAS NOT AFFECTED HOUSING PRICES, WHICH IS A SHOCKING ASKED OF IT. JONATHAN: THANK YOU FOR THINKING OF IS -- OF US. WE APPRECIATE IT. THE PARTNERS EXPECTING A PARTIAL GOVERNMENT SHUTDOWN. LOOKING AHEAD TO THE DATA. STOCKS LOWER AFTER A RECORD RALLY. THE TOYA FERNANDEZ SAYING NOW IS THE TIME TO BE SELECTIVE. THE ENTIRE MARKET WILL B

E DRY -- DRAGGED DOWN, BUT YOU CAN BE OPPORTUNISTIC IN THE MEANTIME. ASSOCIATED WITH TRIMMING SOME OF THESE NAMES. HOW BIG IS THAT FOR YOU? >> WE HAVE BEEN ON A -- ON AN ISLAND FOR A WHILE. AHEAD OF THEMSELVES WHEN IT COMES TO TIMING. WE DO NOT MIND BEING OUT BY OURSELVES A LITTLE BIT, BUT WHEN YOU HAVE LONG-TERM INVESTORS, YOU WANT TO HAVE EXPOSURE TO THESE NAMES, BUT WHEN YOU HAVE THE RUN UPS THAT YOU HAVE HAD, NVIDIA HAD GREAT EARNINGS. WHEN YOU HAVE A RUN-UP LIKE WHAT YOU HAVE SEEN, IT MAKES

SENSE THAT YOU SHOULD GO IN AND TRIM A LITTLE BIT OF THAT. WE ARE NOT SAYING TO LIQUIDATE YOUR HOLDINGS, BUT WE DO THINK THIS MOMENTUM WE ARE SEEING IN THE MARKET WILL GO ON FOR A LITTLE BIT LONGER. WE DO THINK THEY WILL RAISE THEIR HEAD AGAIN TOWARDS THE MIDDLE OF THE YEAR . JONATHAN: YOU SAID THE EQUITY MARKET WAS PRICE FOR PERFECTION. >> YOU LOOK AT THE VALUATION OF THIS MARKET. THERE ARE NOT THAT MANY TIMES HISTORICALLY WHERE WE HAVE HAD THIS LEVEL, AND WHAT WE HAVE, IT HAS BEEN FOLLOWED BY

SOME NOT GREAT NEWS IN THE MARKET. UP OVER 21%. THE EARNINGS PROPONENT -- COMPONENT IS UP. YOU HAVE BEEN TALKING ABOUT THE CONSUMER THIS MORNING AND THE STRENGTH OF THAT AND THE MOMENTUM THAT GOES ALONG WITH IT. YOU CANNOT FIGHT THAT THE SHORT TERM, BUT WE DO THINK SIX TO 12 MONTHS OUT, YOU WILL SEE THE MARKET PULLBACK AND THAT IS WHAT YOU HAVE TO BE PREPARED FOR. LISA: HOW MUCH IS THAT PURELY EVALUATION IN PLAY AND HOW MUCH IS THAT A CONCERN WITH GOOGLE AND GENERATIVE AIA, HAD A MODEL BECAUSE

OF CONTROVERSY? >> IT IS NOT JUST THE SATURATION OF THAT EITHER. WE SAY IT WAS PRICED TO PERFECTION. GOOGLE IS OBVIOUSLY AN EXAMPLE, BUT ALSO LOOKING AT SOME OF THE COST ASSOCIATED. THERE IS A LOT OF DEVELOPMENT THAT STILL NEEDS TO BE DONE AND IT IS NOWHERE NEAR PERFECT. ALSO THERE IS A PERFECT EXAMPLE OF HOW THAT IS HAPPENING. WE DO NOT KNOW HOW MUCH PRODUCTIVITY WILL GROW FROM THIS. WE DO NOT KNOW HOW IT WILL AFFECT THE LABOR FORCE. THERE ARE A LOT OF UNKNOWN QUESTIONS TO HAVE SUCH AN IMPORTAN

T PRICING MECHANISM ON THESE. IT HAS THE MOMENTUM THAT HAS BEEN BUILDING IN THE EQUITY MARKET. LISA: YOU ARE NOT TALKING ABOUT WHOLESALE SELLING OR ANYTHING OF THAT NATURE. YOU TALK ABOUT A TRADABLE MOMENT. SO HOW DO YOU KNOW WHEN WE HAVE SHIFTED FROM THIS PERIOD OF TIME WHERE PEOPLE ARE REALLY ENTHUSIASTIC AND RISK ON? HOW DO WE KNOW WE ARE REACHING THAT TIPPING POINT OF WHAT COMES NEXT? >> YOU WANT TO WATCH ARE CONFIDENT. HISTORICALLY, THERE IS A STRONG CORRELATION IN THE CHANGE IN CONSUMER SP

ENDING. WE SHOULD BE GETTING A CONTRACTION IN CONSUMER SPENDING AND WE HAVE TO WATCH SPREADS BECAUSE THERE'S -- THEY ARE SO INCREDIBLY TIGHT. WHEN ARE WE GOING TO SEE SOME OF THOSE WIDENING OUT? THAT WILL BE A TELLTALE SIGN. WHEN YOU START TO SEE SOME OF THOSE OPEN RATES COME DOWN, U-VERSE -- YOU WILL START TO SEE YIELDS COMING LITTLE HIGHER. JONATHAN: WHY WOULD I LIKE TO GO ANYWHERE NEAR FINANCIALS? >> SIX TO 12 MONTHS OUT IS WHEN WE THINK YOU WILL SEE SOME TURNING HAPPENING. BECAUSE OF THE PUL

LBACK -- I'M NOT TALKING ABOUT SOME OF THE REGIONAL BANKS THAT HAVE BEEN STRUGGLING, BUT JP MORGAN IS OUR FAVORITE NAME IN THE SPACE. YOU CAN ADD SOME EXPOSURE THAT IS QUITE REASONABLE HISTORICALLY. IT IS MORE OF AN OPPORTUNISTIC TRADE TO GET INTO SOME NAMES THAT HAVE BEEN PULLED BACK ALONG WITH INDUSTRIALS SHOWING LEADERSHIP. YOU ARE SEEING SOME GOOD TRENDS IN THOSE SECTORS. JONATHAN: DOESN'T NOT CONCERN YOU THAT YOU ARE SELLING THE STOCK? >> KNOW. WHEN YOU LOOK AT THE BALANCE SHEETS, YOU KNOW

THAT WHEN WE BUY EQUITY MEANS, WE ARE DIVING DEEP. IT IS ONE OF THE STRONGEST BALANCE SHEETS THAT WE SEE OUT THERE AND HISTORICALLY IT IS SITTING IN SUCH GOOD SHAPE VERSUS WHERE IT HAS BEEN IN THE PAST. WE THINK THAT THEY WILL CONTINUE TO BE THE LEADER IN THIS SPACE. JONATHAN: GOOD TO CATCH UP. SONY INTERACTIVE. A HEADCOUNT BY 8% GLOBALLY. LISA: ABOUT 900 PEOPLE. EVERY COMPANY IS TALKING ABOUT TRIMMING AROUND THE EDGES. JOBLESS CLAIMS KEEP COMING IN AT LOW LEVELS. JONATHAN: WE ARE SEEING A LOT O

F GAIT -- A LOT OF JOB CAP -- CUTS IN THE GAMING INDUSTRY. LET'S GET AN UPDATE ON STORIES ELSEWHERE. >> EXPEDIA IS CUTTING 9% OF ITS JOBS FOR US. EXPEDIA WILL CUT ABOUT 1500 JOBS GLOBALLY AND SOME EMPLOYEES WERE NOTIFIED ON MONDAY. EXPEDIA REPORTED DISAPPOINTING RESULTS AND ANNOUNCED A SHAKEUP. BLOCKING KROGER'S TAKEOVER OF ALBERTSON. THEY JOIN EIGHT STATES AND WASHINGTON DC AND IMPOSING A DEAL. THE MERGER WOULD BE THE BIGGEST DEAL IN HISTORY. ALPHABET SHARES FELL ALMOST 4.5% YESTERDAY ON FEARS

THAT MISSTEPS ARE PUTTING BUSINESS AT RISK. THEY HAVE WARNED THAT GOOGLE IS AN UNRELIABLE SOURCE AND COULD CREATE AN OPENING FOR COMPETITORS. JONATHAN: BIDEN PRESSURING CONGRESS, HEAD. >> I THINK WHAT ENDS UP HAPPENING YEAR IS THAT THEY KICK THE CAN FOR A WEEK OR TWO. JONATHAN: THIS IS BLOOMBERG. ♪ JONATHAN: EQUITY IS THE THING JUST A BIT. . 10 HERE TODAY. BIDEN PRESSURING CONGRESS. >> THE ODDS OF AVOIDING A SHUTDOWN SHORT-TERM ARE PRETTY GOOD. THEY WILL PROBABLY KICK THE CAN A LEAK OR TWO. THE

IDEA IS THAT I APRIL 30 THERE WILL BE CUTS, IF THEY CANNOT MAKE A DEAL. JONATHAN: COMING A LEAK BEFORE A FULL ON SHUTDOWN. WE BELIEVE A PARTIAL SHUTDOWN IS COMING, BUT THE BIGGER ISSUE IS MARCH 8 WHEN FUNDING WOULD BE SHUT DOWN. A SHORT-TERM DEAL TO KEEP THE GOVERNMENT OPEN BEYOND MARCH 8 WILL EMERGE. HENRIETTA JOINS US NOW TO TALK ABOUT THOSE ON A LITTLE BIT MORE. WHAT ARE THE ODDS NOW FOR THIS SPEAKER THAT HE CAN MAKE A DEAL AND HOLD ON TO HIS JOB? >> MOST REMEMBER WHAT IT WAS LIKE WHEN THEY W

ENT WITHOUT A SPEAKER. THERE IS NOT ANOTHER MEMBER WAITING IN THE LATE. WHAT YOU SEE THAT I THINK IS MOST INTERESTING IS MITCH MCCONNELL TRYING TO STEP IN AND SAYING, YOU OBVIOUSLY CANNOT RUN THE SHIP. WE WILL HAVE TO DO ANOTHER SHORT-TERM EXTENSION. AN EXTENSION TO MARCH 22 MAKES SENSE. WE DO NOT HAVE A DEADLINE UNTIL MAY 1, SO BY THAT TIME IT WILL HAVE EFFECTIVELY BEEN KICKED FOR ABOUT A YEAR. WHERE WE HAVE BEEN GOING STOPGAP AFTER STOPGAP. THE BIG TEST WILL BE IN MID MARCH TO APRIL TIMEFRAME.

THEY WANT TRANSGENDER CARE, ETC. THEY ARE GOING TO HAVE TO RESET REALITY, EVENTUALLY. EMORY: THEY ARE NOT GOING TO GET THIS POLICY PROVISIONS THAT THEY WANT. WHY DO THEY CONTINUE TO HOLD OUT? >> THAT WAS SUPPOSED TO BE THE MITIGATING FACTOR. IT WAS NOT DESIGNED TO HURT DEMOCRATS BUT IT WAS DESIGNED TO HURT REPUBLICANS YEAR FROM NOW. IF WE CAN GET AN AGREEMENT THAT AVOIDS THESE AGGRESSIVE TO GOD CUTS, THAT IS WHAT MCCARTHY WOULD REALLY HELP REPUBLICANS. THAT WAS THE HOPE LAST YEAR. MAYBE THREE O

R FOUR OF THEM ARE SAYING, I FIND. BUT UNFORTUNATELY, MEMBERS THOSE DISTRICTS HAVE A REAL PROBLEM WITH IT AND ARE NOT GOING TO LET THOSE CUTS GO INTO EFFECT. THEY'RE GOING TO HAVE TO RELY ON DEMOCRAT AGAIN. ANNE-MARIE: WE HAVE THE FRONT RUNNER FOR THE REPUBLICAN NOMINATION TALKING ABOUT A MORE ISOLATIONIST TONE. ISN'T THAT MORE STRIKING NOW? >> YOU WANT AN ISOLATIONIST POLICY POTENTIALLY WITH UKRAINE SPECIFICALLY, BUT YOU ALSO WANT A TREMENDOUS AMOUNT OF FUNDING AT THE U.S. BORDER. THAT IS CUSTO

MS AND BORDER CONTROL, MORE EXTENSIONS. THAT IS STILL ADDITIONAL SPENDING, SO IT IS A MATTER OF REACHING A DEAL. THERE IS NO DELL CAPABLE OF GETTING THROUGH THE SENATE THAT THE RIGHT WOULD FIND ACCEPTABLE. NOT HAS BEEN THE CASE FOR AT LEAST A DECADE. ANNE-MARIE: TALKING ABOUT FOREIGN AID. WHEN DO YOU SEE THAT GETTING DONE? >> I DO NOT SEE A BIG BILL GETTING DONE ANYTIME SOON. I THINK PRESIDENT BIDEN WILL BE GIVEN AN OPPORTUNITY WITH THE MICHIGAN PRIMARY UNDERWAY. THERE IS A LOT OF ATTENTION ON T

HE MUSLIM THE THAT COULD VOTE UNDECIDED OR UNDECLARED. HE IS UP 70 POINTS IN THAT STATE VERSUS HIS OTHER CHALLENGER, BUT THIS IS HELPFUL AS A WAY TO ILLUSTRATE THAT THERE MIGHT BE A CEASE-FIRE THAT WE CAN NEGOTIATE FOR RAMADAN. MONTHS MAY HAVE GONE BY. NOTHING IN TAIWAN. THERE IS STILL A LOT THAT THEY HAVE BEEN ASKING FOR. THERE IS A LOT OUT THERE THAT THEY NEED TO GET DONE AND HE IS TRYING TO COMPEL THEM TO MOVE IT FORWARD. JONATHAN: REFERRING TO CLIENT CONVERSATIONS ABOUT POLITICS AND THIS YEA

R'S ELECTION AS STARING AT THE SUN. I WONDER IF THAT HAS CHANGED. HAVE THEY COME AROUNDS THE IDEA THAT THEY NEED TO POSITION FOR WHAT MIGHT HAPPEN IN NOVEMBER? WHAT ON EARTH DOES THAT LOOK LIKE? WHAT ARE THEY SAYING? >> PEOPLE ARE REALLY EXCITED ABOUT IT. THERE ARE A LOT OF LUNCHES AND MEETINGS WHERE PEOPLE JUST WANT TO TALK ABOUT INVESTORS AND TRADE AS IF THE ELECTION WERE TOMORROW. THERE IS AN ETERNAL POWER STRUGGLE. THEY ARE CHOMPING AT THE BIT FOR THAT AND THIS IS A HUGE EVENT. AND INVESTORS

LOVE THAT. I WOULD SAY THAT WE ARE PRETTY CLOSE TO FEVER PITCH. THERE ARE PEOPLE WHO ASK THAT QUESTION AND PEOPLE SAY, WHEN WILL THIS KICK INTO HIGH GEAR? BUT WE ARE THERE. IT IS ON. JONATHAN: HAVE YOU NOTICED WE HAVE REDUCED THIS TO ONE ISSUE? IF IT IS PRESIDENT TRUMP IT IS MASSIVE TARIFFS AND IF IT IS PRESIDENT BIDEN, THERE WILL NOT -- THEY WILL NOT BE THAT BIG? >> WE HAVE THAT WHOLE LITANY OF PROVISIONS THAT IS CORPORATE AND INDIVIDUAL, WHETHER LONG-TERM -- THERE IS TONS OF THAT STUFF AND TH

EN THE TARIFFS, PEOPLE WERE SAYING, WHAT IS THE DIFFERENCE? SHOULD I INSERT IT AS A PLACEHOLDER? WHAT WILL THE DEFICIT BE? WHAT DO WE DO WITH BONDS? PEOPLE ARE JUST TRYING TO PICK WHICH ONE IS GOING TO COME FIRST AND I THINK IT IS IMPORTANT AS THEY GO INTO OCTOBER AND NOVEMBER. JONATHAN: WHAT A YEAR AHEAD. WE KNOW WHAT -- WE KNOW WHICH ONE CAME FIRST. IT WAS TAXES AND THEN IT WAS TARIFFS. ANNE-MARIE: THERE WILL BE AN EXTENSION OF TAX PRODUCTIONS. SO ALREADY YOU ARE GOING TO SEE ADDITIONS TO THE

DEFICIT REGARDLESS OF WHAT PRESIDENT COMES IN. LISA: BUT NOTHING HAS REALLY WORKED OUT. IT IS A FRUSTRATING CONVERSATION FOR ME. JONATHAN: DO YOU WANT TO TALK ABOUT MORTGAGES? TELL ME ABOUT YOUR MORTGAGE. LISA: IS THAT HOW YOU ARE GOING TO CALL ME DOWN FROM NOW ON? JONATHAN: A BUSY WEEK OF ECONOMIC DATA KICKING OFF. ECONOMIC DATA, UP NEXT. JONATHAN: SECONDS AWAY FROM ECONOMIC DATA. ON THE NASDAQ, UP .1%. YIELDS A LITTLE BIT LOWER. ON THE 10 YEAR, TOTALLY UNCHANGED. AT THE VERY LONG AND, JUST ABO

UT UNCHANGED AS WELL. TO WORK THROUGH THE DURABLE GOODS ORDERS AND TO STRIP OUT THE EFFECT OF THIS. MIKE MCKEE'S IS HERE WITH MORE. MIKE: WE DID ANTICIPATE A 5% DROP. EVEN TRANSPORTATION IS DOWN. A LOOK AT THE ACTUAL NUMBERS. THIS IS THE PART THAT GOES INTO GDP. THIS IS WHAT WAS FORECAST. SHIPMENTS ARE UP MORE THAN ANTICIPATED. IT SUGGEST A STRONGER GDP NUMBER AND IN COMBINATION THE CAPITAL GOOD ORDERS SUGGEST THAT BUSINESSES HAVE NOT YET BEEN PULLED BACK TOO MUCH ON WHAT THEY ARE ORDERING AND S

PENDING. JONATHAN: AN HOUR AFTER THAT WE WILL GET CONSUMER NUMBERS. LOOKING AT EQUITY MARKETS AND LABOR DATA FOR TWO YEARS, ARE WE SEEING CONFIDENCE PICK UP? MIKE: WE ARE. EACH ONE IS DESIGNED A LITTLE SEPARATELY. WE SAW SOME GOOD NEWS ON JOBS LAST TIME. THE NUMBERS WATCH FOR IS PEOPLE'S ANTICIPATION OF WHAT THE INCOME WILL BE OVER THE COMING SIX MONTHS TO A YEAR. IF PEOPLE THINK THEY WILL MAKE MORE MONEY, THAT SUGGEST THAT THEY WILL CONTINUE SPENDING AT THE RATE THAT THEY ARE DOING. THIS ONE DO

ES NOT HAVE THE POLITICAL IMPLICATIONS. THEY DO NOT BREAK IT DOWN BY POLITICAL PARTY. LISA: THEY HAVE TO TRACK IT MORE CLOSELY. THEY HAVE BEEN A NUMBER OF DISCUSSIONS ABOUT HOW PRICING IS WE ACCELERATING, DESPITE THE FACT THAT YOU ARE SEEING MORTGAGE RATES WHERE THEY ARE. MIKE: THEY ARE WATCHING IT BUT ARE NOT AS CONCERNED BECAUSE THEY FEEL WHEN INTEREST RATES START TO COME DOWN, THERE WILL BE A PENT-UP DEMAND TO SELL HOUSING AND WE WILL SEE A LOT MORE INVENTORY ON THE MARKET. NOBODY WANTS TO SE

LL THEIR 3% MORTGAGE. PEOPLE ARE JUST SITTING THERE, BUT A LOT OF PEOPLE ARE RETIRING AND THEY WANT TO MOVE TO FLORIDA . THERE ARE YOUNG PEOPLE WITH KIDS. MICHAEL AND EVERYBODY WAS WONDERING ABOUT BOEING. NEW ORDERS. THAT IS WHY YOUR HEADLINE LOOK SO AWFUL. JONATHAN KLEIN EQUITIES JUST ABOUT POSITIVE. JOINING US NOW TO REACT, DANA PETERSON. WONDERFUL TO HAVE YOU WITH US ON THE PROGRAM. HOW MUCH SHOULD LEAVE EDEN INTO THIS DATA? GIVEN THE BOEING EFFECT THAT HE JUST WENT WITH -- THAT HE JUST WENT

THROUGH? >> IT IS AN INDICATOR OF SHIPMENTS IN THE PRESENT TENSE AND HOW WELL WE WILL SEE BUSINESS PICK UP. WE KNOW THAT BUSINESSES IN OUR OWN SURVEY ARE NOT REALLY CHANGING INVESTMENT PLANS. IF THEY DID NOT PLAN TO DO ANYTHING, THEY ARE NOT GOING TO, BUT THAT WILL BE A KEY THING. ESPECIALLY GIVEN THE DEGREE OF UNCERTAINTY. JONATHAN: IS THAT HAPPENING SIMULTANEOUSLY? >> IT DID PICK UP AND IT WAS POSITIVE. BUSINESSES ARE LOOKING AT CONTINUING TO RAISE WAGES AND ARE STILL CONCERNED ABOUT GEOPOLITI

CS, BUT THEY ARE OPTIMISTIC THAT THERE IS GOOD NEWS FOR THE U.S. ECONOMY, GOING FORWARD. LISA: HOW PREDICTIVE ARE THEY? >> IT DOES A BETTER JOB TELLING US OF WHAT -- OUR HEADLINE INCLUDES BUSINESS CONDITIONS, INCOME AND EMPLOYMENT. WE DID SEE INFLATION REALLY BOTHER CONSUMERS LAST YEAR, BUT INFLATION HAS EASED AND WE ARE SEEING THAT IN OUR NUMBERS, AND WE SEE THAT CONSUMERS HEADING INTO THIS YEAR AND FOR THE FIRST READING OF THIS YEAR, WE HAVE -- DOING A LITTLE BIT BETTER. LISA: IT IS HARD TO TA

LK ABOUT THIS AS A MONOLITH. YOU CAN SEE A CLEAR VOCATION AND THOSE WHO HAVE LOWER INCOMES. HOW MUCH ARE THERE DIFFERENT AUDIENCES THAT ARE REFLECTED IN THESE NUMBERS? >> WE DO ASK CONSUMERS WHEN IT COMES TO INCOME AND AGE, BUT THERE IS THIS OVERALL SENTIMENT THAT WE GATHER, AND WHEN WE LOOK AT THE DATA, WE ARE VERY MUCH LOOKING FORWARD TO THE REPORT THIS WEEK. CONSUMERS, ARE THEY SPENDING MORE? WE SAW THAT IN THE SECOND HALF OF LAST YEAR AND WE SAW A CREDIT CARD USE RISE. THEY ARE BUILDING UP A

LOT OF DEBT AND THE COST OF CARRYING THAT DEBT IS A LOT HIGHER, GIVEN THAT THE FED HAS RAISED INTEREST RATES AND THEY ARE PROBABLY NOT LOOKING TO CUT RATES UNTIL ABOUT JUNE OF THIS YEAR. JONATHAN: WHAT DOES THAT LOOK LIKE RELATIVE TO INCOME? >> IT IS GOOD TO LOOK AT THE AMOUNT OF INTEREST. THAT HAS SKYROCKETED. THAT IS A PROBLEM. WE SEE THIS AS BEING UNSUSTAINABLE, ESPECIALLY IF WE CAN SET -- IF WE SEE IT IN THE LABOR MARKET. I THINK THAT PUTTING ALL THIS TOGETHER, WE WILL SEE SLOWER GROWTH. WE

DO HAVE GROWTH HOVERING AROUND ZERO BUT THEN PICKING UP AS INTEREST RATES GO DOWN. JONATHAN: ONE OF THE QUOTES FROM IT, WE KNOW THE LIKELIHOOD HAS INCREASED. THEY BELIEVE THE LIKELIHOOD HAS INCREASED. HOW MUCH IS DOWN TO THE GROWTH NUMBERS OVER THE LAST SIX WEEKS OR SO? >> IT DEPENDS ON HOW YOU DEFINE SOFT LANDING. I LOOK AT IT AS NOT GOING INTO A RECESSION. WHATEVER THE THRESHOLD OR THE RANGE IS FOR EACH ECONOMY. BUT WE NEVER CALLED FOR A RECESSION. WE HAVE SEEN THAT THROUGHOUT. JAPAN DIPPED I

NTO A RECESSION. LEE COULD CONTINUE TO SEE THAT, BUT IN TERMS OF GLOBAL RECESSION? NO. WE ARE CONFIDENT THAT IT WILL CONTINUE TO ACCELERATE. WE THINK THAT THE MAJORS WILL START CUTTING INTEREST RATES AROUND SPRINGTIME. LISA: I'M TRYING TO UNDERSTAND THE BLURRY LINE VERSUS MORE PROTRACTED WEAKNESS. THE DELINQUENCY MODEL IS SHOWING AN INCREASE IN QUARTER OF ORDER DELINQUENCIES. IT WOULD BRING US TO NINE CONSECUTIVE INCREASES. DANA, UNDERSTANDING THAT THIS IS UP HERE LOWS, WHEN DOES THIS CREATE A R

EAL PROBLEM THIS IDEA THAT THE WEST REMAINS THE BASTION OF GROWTH THAT JONATHAN WAS JUST REFERRING TO? >> WE DO NOT THINK THE U.S. WILL REMAIN THIS BASTION OF GROWTH. WE STILL HAD THE REMNANTS OF FISCAL STIMULUS FROM CHECKS AND SAVINGS BEING SPENT DOWN. MANY COMPANIES DID NOT LET PEOPLE GO, SO PEOPLE CONTINUE TO WORK, EVEN THOUGH COMPANIES FELT LIKE THERE WAS SOMETHING BAD COMING DOWN THE LINE. AND AGAIN, YOU SAW PEOPLE USING CREDIT CARDS TO SUPPLEMENT THEIR SPENDING. IT IS BACKING UP INTO THE B

ANKS THAT ARE ISSUING THESE CREDIT CARDS. THE FED DID RAISE INTEREST RATES AGGRESSIVELY, HIGHER THAN WHAT WE HAVE SEEN DECADES, AND THAT WILL COME HOME TO ROOST. I DO NOT THINK THAT THE U.S. WILL NEED THE ECONOMY GROWTH THIS YEAR. CHINA WILL PROBABLY RATCHET DOWN. IT ALL SUGGESTS SLOWING GLOBAL GROWTH THIS YEAR. WE EXPECT THAT THERE WILL BE A LITTLE BIT OF PICKUP AS MANY CENTRAL BANKS WILL BE CUTTING INTEREST RATE AND IT WILL HELP TO BOLSTER ECONOMIES. LISA: YOU THINK IS THE BIGGER RISK? >> I TH

INK THE RISKS ARE ROUGHLY BALANCED. YOU COULD CONTINUE TO SEE THEM WORKING THE HOUSING MARKET IS GETTING UP STRENGTH. WHEN THE FED ACTUALLY CUTS, THERE ARE TREMENDOUS DOWNSIDES. WE COULD HAVE FURTHER DISRUPTIONS AND SUPPLY CHAINS. NOT SO MUCH AFFECTING THE U.S., BUT IF WE DO HAVE ANY DISRUPTION IN ASIA, THAT WILL AFFECT CHIPS. IT MAY SHAKE UP POLICIES AROUND TRADE AND TAXES. THERE ARE A LOT OF UNCERTAINTIES OUT THERE. IT IS ROUGHLY BALANCED. JONATHAN: THANK YOU. GREAT TO CATCH UP WITH YOU AT THE

CONFERENCE BOARD. HOW DEPENDENT THEY ARE ON ONE COMPANY AND WHAT IS HAPPENING WITH TELLING. LISA QUAN AT SOME POINT THEY ARE GOING TO HAVE TO START SELLING PLANES AGAIN. YOU DO NOT WANT TO THINK ABOUT QUALITY CONTROL. JONATHAN: YOU DO NOT WANT TO THINK ABOUT THAT AT ALL. I THINK BROOKE SUTHERLAND WAS ON TOP OF IT FIRST. I WANT TO BE POLITE BECAUSE THIS IS NOT EVERYONE COVERS THAT STOP CERTAIN INDIVIDUALS TO DO COVER THAT TALK ARE RELUCTANT TO TALK ABOUT THE CULTURAL ISSUES IN THAT FIRM BECAUSE

OF THE TRADITIONAL OLD AGE ISSUE. LISA: IT IS ALSO HARD TO QUANTIFY QUALITATIVE CHANGES THAT SHIFT A COMPANY IN A DRAMATIC WAY, BUT IF YOU DO NOT, YOU'RE NOT ABLE TO ADDRESS REAL PROBLEMS. YOU NEED TO QUANTIFY HOW STRAIGHT YOU HAVE GONE. JONATHAN: IT WILL BE MIKE MCKEE'S JOB. MIKE CAN BREAK THAT DOWN FOR YOU ANOTHER TIME. JUST ABOUT UNCHANGED ON THE S&P. HERE IS YOUR BLOOMBERG BRIEF. QUEST A GROWING CHANCE OF PULLING OFF A SOFT LANDING ACCORDING TO A DRAFT AT THIS WEEK'S MEETING IN BRAZIL. RISK

TO THE GLOBAL ECONOMY OUTLOOK ARE MORE BALANCED AND UPSIDE RISKS INCLUDE FASTER THAN EXPECTED DISINFLATION. SHARES AS MUCH AS 60% AFTER BLOOMBERG REPORTED THEY WERE IN A TAKEOVER. CHARTER IS WORKING WITH FINANCIAL ADVISORS BUT COULD STILL DECIDE NOT TO PURSUE THE TRANSACTION. FIRMS ARE SUFFERING WITH A SURGE IN WIRELESS A PETITION WITH CUSTOMERS FLEEING TRADITIONAL TV IN FAVOR OF STREAMING. CHOCOLATE LOVERS COULD BE A FOR A PRICE SHOCK WITH THE COST OF COCOA AT AN ALL-TIME HIGH. A PRICE JUMP OF

MORE THAN 50% THIS YEAR. THE NEW REGULATION REQUIRES THAT CHOCOLATE MAKER'S PROOF THAT THEY DID NOT CONTRIBUTE TO DEFORESTATION. IT THREATENS TO DRIVE PRICES EVEN HIGHER. JONATHAN: UP NEXT, THE STATE OF THE AMERICAN CONSUMER. >> THE FED RAISES RATES IN ORDER TO SLOW THE ECONOMY AND TO BREAK THE CONSUMER. JONATHAN: DO YOU WANT TO SAY SOMETHING ABOUT THAT CHOCOLATE STORY? LISA: I'M WAITING FOR YOU TO SAY SOMETHING. JONATHAN: I WILL TELL YOU DURING THE BREAK. THIS IS BLOOMBERG. ♪ JONATHAN: OPENING

UP IN ABOUT 40 MINUTES TIME. POSITIVE BY 1%. YIELDS UP A SINGLE BASIS POINT ON THE 10 YEAR. UNDER SURVEILLANCE THIS MORNING, THE STATE OF THE AMERICAN CONSUMER. >> THE FED RAISES RATES TO SLOW THE ECONOMY AND ARGUABLY TO BREAK THE CONSUMER. BUT WITH THE ECONOMY ACCELERATING INTO THE YEAR-END AND THE CONSUMER STILL VERY RESILIENT, IT IS NOT YET CLEAR THAT THE FED HAS DONE ENOUGH TO ENSURE THAT THE U.S. ECONOMY GETS BACK TO A PLACE OF PRICE STABILITY. JONATHAN: MACY'S ISSUING DISAPPOINTING GUIDANC

E. STOCK IS DOWN 1.7%. CALLING 2024 A YEAR OF TRANSITION AND INVESTMENT AS THE DEPARTMENT STORE CHAIN LOOKS TO CLOSE UNDERPERFORMING LOCATIONS. LOWS DEVELOP -- EVEN AS IT SEES A CONTINUED PULLBACK. THAT STOCK LITTLE BIT SOFTER. JOINING US IS JOE. HOW STRONG ARE THE HEADWINDS FOR THE LIKES OF HOME DEPOT AND LOWE'S? >> YOU'RE STILL SEEING SOME PRETTY STRONG HEADWINDS WHERE CONSUMERS SPEND A LOT DURING THE PANDEMIC, WE ARE NOW COMING OFF OF THAT AND PEOPLE ARE DEFINITELY MODERATING THEIR SPENDING.

THEY ARE SHIFTING TO OTHER AREAS , WHICH IS A GOOD THING AND SHOWS THE HEALTH OF THE CONSUMER ABLE TO SPEND IN DIFFERENT POCKETS, BUT FOR THE NEAR TERM THEY WILL REMAIN CHALLENGED. JONATHAN: ARE WE STILL TALKING ABOUT UNDERLYING TRENDS AND SERVICES? >> I THINK YOU ARE STILL SEEING THAT SHIFT TOWARD SERVICE IS HAPPENING. DINING, TRAVEL AND CONCERT GOING, THINGS LIKE THAT ARE GROWING AT A FASTER CLIP. YOU'RE NOT QUITE BACK TO THAT PRE-PANDEMIC LEVEL, WHEN YOU LOOK AT THE MIX OF GOODS AND SERVICES.

THEY STILL HAVE ROOM TO GO IN TERMS OF GROWTH. WE HOSTED A CALL WITH THE CEO OF DELTA AIRLINES AND HE TALKED A LOT ABOUT THE RECOVERY CONTINUING TO HAPPEN. HOME DEPOT HAS TALKED ABOUT IT AND WE WILL PROBABLY HEAR IT FROM LOWE'S AS WELL. LISA QUAN I HAVE GONE TO SEPHORA AND I HAVE SEEN ALL THE 10-YEAR-OLDS BUYING BILLY EXPENSIVE STUFF. I WAS STRUCK BY THE IDEA THAT MACY'S X -- IS SPENDING MORE ON SKINCARE. IS THIS LASTING OR A MOMENTARY KIND OF LIFT AT ALL THESE COMPANIES ARE TRYING TO CAPITALIZ

E ON? >> THAT WHOLE BUSINESS HAS BEEN STRONG AND IS EXPECTED TO REMAIN GROWING AT A HEALTHY CLIP FOR THE NEXT SEVERAL YEARS, GOING FORWARD. I THINK IT MAKES SENSE FOR COMPANIES TO GO AFTER THAT. YOU HAVE WALMART, TARGET AND EVERYONE ELSE IN BETWEEN TRYING TO GO AFTER THAT MARKET MORE AGGRESSIVELY, AND THEY ARE SEEING GOOD GROWTH IN THOSE CATEGORIES. I UNDERSTAND WHY THEY WOULD GO AFTER IT. BUT AS YOU JUST MENTIONED, WE ARE HEARING MORE ABOUT YOUNG GIRLS WITH 10 STEP FACIAL REGIMENS EVERY NIGHT.

IT IS KIND OF CRAZY BUT THAT IS KIND OF WHAT SOCIAL MEDIA HAS DONE TO KIDS THESE DAYS. THAT MEANS MORE SPENDING ON HEALTH AND BEAUTY PRODUCTS. LISA: I JUST WONDER WHERE THEY ARE GETTING THE MONEY. MORE POWER TO THEIR 10 STEP ROUTINES, BUT I AM CURIOUS. WHERE IS THE DISCRETIONARY SPENDING GOING? IS IT BECAUSE OF STRENGTHEN THE CONSUMER OR IS IT BECAUSE YOU HAVE HIGHER INCOME FAMILIES THAT ARE ABLE TO GO OUT AND HAVE THIS AS AN EXPERIENCE VERSUS THE PEOPLE RUNNING OUT OF DISCRETIONARY SPENDING ON

THE LOWER AND NOT BUYING GOODS AS MUCH. QUEST MORE AFFLUENT CONSUMERS ARE THE ONES THAT ARE TRAVELING AND DINING OUT. AT THE LOWER END, YOU ARE DEFINITELY SEEING CASH-STRAPPED CONSUMERS MAKING THE SITE -- DECISIONS ON WHAT TO SPEND ON. EVERYONE IS TALKING ABOUT THE FACT THAT PEOPLE ARE STRETCHING DOLLARS FURTHER. THEY ARE OPTING FOR A PRIVATE LABEL BRANDS. THIS IS NOT TO SAY THAT EVERYBODY IS DOING BETTER, BUT EVEN THE LOW-END CONSUMER HAS SEEN SOME WAGE GROWTH. THAT'S WHY I THINK THERE IS GROWT

H. ANNE-MARIE: CUTTING BACK ON SOME MACY'S STORES. COULD WE SEE THE FACT THAT SOME OF THESE ORGANIZATIONS GO INTO THOSE AND WE WILL SEE A HALLOWEEN OUT OF MIDDLE-OF-THE-ROAD RETAILERS? >> THAT IS A BIG CONCERN THAT WE HAVE. DEPARTMENT STORES -- THE WINNERS HAVE BEEN AT THE TWO EXTREMES. AND THE OFF-PRICE IS TJX. THEY HAVE BEEN PICKING UP THAT PORTION OF THE CONSUMER BASE. BUT THEY ARE UNDER A LOT OF PRESSURE. I THINK WE HAVE SEEN SOME OF THE PRESSURE AT KOHL'S AND OTHER DEPARTMENT STORES HAS BEE

N WEAKENING. THAT HALLOWEEN OUT IN THE MIDDLE HAS BEEN A PROBLEM. TO GO FORWARD, YOU STILL THE NEED THAT OFFERING FROM THE CONSUMER AND I THINK THEY ARE STARTING TO FIND IT. JONATHAN: TOP PICK. IS THAT WHERE YOU FIND IT? >> I STILL REALLY LIKE WALMART. EXECUTION HAS BEEN GOOD. JONATHAN: IS THE REGULATOR DOING THEM A FAVOR BY BLOCKING THIS DEAL? >> IT WILL BE INTERESTING TO SEE WHAT HAPPENS BECAUSE THE REGULATORS HAVE NOT BEEN VERY SUCCESSFUL THE LAST FEW YEARS. IT HAS NOT WORKED. EVERY DEAL IS D

IFFERENT. AFTER THE COMBINATION, WALMART IS STILL GOING TO BE A GOOD BIT LARGER, ALMOST 10 POINTS LARGER DEPENDING ON WHAT ESTIMATE YOU LOOK AT. JONATHAN: WE WILL HAVE TO TALK ABOUT THAT AT ANOTHER TIME. INFLUENCERS, DREADFUL PEOPLE, GETTING PEOPLE TO SPEND MORE MONEY ON MAKEUP AND SKIN CARE REGIMES. WE SHOULD DO THAT STORY. WHAT ELSE WOULD YOU LIKE TO DO? LISA: WE HAVE THIS NARRATIVE THAT MIGHT BE FALSE ABOUT THE CONSUMER. WE HEARD FROM DIETER PETERS -- DANA PETER IS. IT IS NOT CLEAR, AND THEY

ARE NOT FINDING THOSE TRENDS, AND I FIND THAT REALLY FASCINATING. ANNE-MARIE: I THINK JOE MADE A GOOD POINT. HE LIKES WALMART AND KROGER CANNOT COMPETE. THESE ARE THE COMPANIES THAT FTC SHOULD BE WRITING BACK, AND WE ARE TRYING TO COMPETE WITH THEM, AND WE CANNOT. WOULD IT CHANGE IF TRUMP CAME INTO POWER? THERE IS ONE UNION AGAINST THIS DEAL, TEAMSTERS. $45,000 TO THE RNC. LISA: WHERE DO 10-YEAR-OLDS GET $182 TO BUY EMPTY -- ANTIOXIDANT TREATMENT? FOR ONE FLUID OUNCE OF BLUE MERCURY. ANNE-MARIE:

INSTEAD OF GETTING ICE CREAM, IT'S, LET'S GO TO SEPHORA. JONATHAN: YOU THOUGHT GEN Z WAS BAD. WAIT 20 YEARS. TOMORROW WITH QUALCOMM CEO.